Report No.

34481 - IN

India
Unlocking Opportunities for Forest-
Dependent People in India
Main Report: Volume I
February 6, 2006

Agriculture and Rural Development Sector Unit

South Asia Region

Document of the World Bank

1
 CURRENCY EQUIVALENTS

Currency unit: Indian rupee (annual average)

2000: $1 = Rs47.0 2002: $1 = Rs49.3 2004: $1 = Rs45.0
2001: $1 = Rs48.5 2003: $1 = Rs46.7 2005: $1 = Rs43.0

FISCAL YEAR (FY)

April 1March 31

ACRONYMS
ANU Australian National University LPG Liquefied Petroleum Gas
APCCF Additional PCCF MAI Mean Annual Increment
BPL Below Poverty Line MIS Management Information System
CBO Community Based Organization MOEF Ministry of Environment and Forests
CIFOR Centre for International Forest Research MOU Memorandum of Understanding
CSO Community Support Organization NABARD National Bank for Agriculture and
DFID Department for International Developm Rural Development
DFO District Forest Officer NEDFI Northeastern Development Finance
DPIP District Poverty Initiatives Program Corporation
FAO Food and Agriculture Organization NFC National Forest Commission
FD Department of Environment and Forests NIRD National Institute of Rural
FDA Forest Development Agency Development
FSI Forest Survey of India NTFP Non-Timber Forest Product
FRDAB Forestry and Rural Development Adviso PCCF Principal Chief Conservator of Forests
Board PESA Panchayat Raj (Scheduled Areas) Act
GDP Gross Domestic Product PFMA Participatory Forest Management
GIS Geographic Information System Agreement
GPS Global Positioning System PRA Participatory Rapid Appraisal
HDI Human Development Index PRI Panchayat Raj Institution
ICFRE Indian Council for Forest Research and RUPFOR Resource Unit for Participatory
Education Forestry
IFS Indian Forest Service SANDEE South Asia Network for Development
ITTO International Tropical Timber Organiza and Environmental Economics
JBIC Japan Bank for International Cooperatio SASAR South Asia Agriculture and Rural
JFM Joint Forest Management Development, World Bank
JSFDC Jharkhand State Forest Development SASES South Asia Social and Environment,
Corporation World Bank
LAC Latin America and Caribbean SSFE Small Scale Forest Enterprise
Region, World Bank TERI The Energy and Resources Institute

Unit Measurements
ac =acre km=kilometer
gm=grams mt=metric ton
ha=hectare
Vice President: Praful Patel
Country Director: Michael Carter
Sector Director: Constance Bernard
Sector Manager: Adolfo Brizzi
Task Manager: Grant Milne

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 INDIA

Unlocking Opportunities for Forest Dependent People

Table of Contents
Main Report Volume I

Acknowledgments...................................................................................................................... vii

Executive Summary viii

Glossary...................................................................................................................................... xx

1. Introduction .............................................................................................................................. 1
Joint Forest Management and Community-Based Forestry Models ...................................... 1
Study Objectives and Structure of the Report ........................................................................ 2

2. Overview of the National Forest Economy............................................................................. 4

Forest Land Base.................................................................................................................... 4
Contribution of Forestry to Gross Domestic Product............................................................. 6
Structure of Domestic Forest-Based Industry ........................................................................ 7
National Wood Supply and Demand Trends.......................................................................... 7
Primary Institutions for Community-Based Forestry in India................................................ 8
Public Expenditures on Forestry ...........................................................................................10
Extent of Joint Forest Management in India .........................................................................12
Global Forest Transitions and Community-Based Forestry..................................................13

3. Evolving Legal and Policy Environment ...............................................................................14

National Legal and Policy Framework ................................................................................14
Legal and Policy Framework in Assam, Jharkhand, and Madhya Pradesh .........................14
The Panchayat Extension to Scheduled Areas Act of 1996: Panacea for Community
Forestry? ..............................................................................................................................19

4. Forests as a Source of Livelihood: Perspectives of Forest Dwellers ...................................21

Characteristics of Forest Dwellers in Assam, Jharkhand, and Madhya Pradesh .................21
Results of Focus Groups and Community Surveys .............................................................22
Community-Based Forestry Institutions in India.................................................................25
Local Perspectives on JFM in the Three Focal States .........................................................26
Forest Livelihoods and Linkages with Rural and Tribal Development
in the Three Focal States...................................................................................................28

5. Forest Management Systems and Community-Based Forestry........................................ 29

Resource Assessment and Planning Systems ..................................................................... 29
Forest Management Systems .............................................................................................. 32
Forest Department Capacity and Community-Based Forestry ........................................... 32
Social Capital Building Processes and JFM ....................................................................... 35
Economic Incentives for Community Participation in JFM in India.................................. 36

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6. Forest Marketing Systems, Benefit Sharing, and Community-Based Forestry................ 37
Marketing of Specific Forest Products in Assam, Jharkhand, and Madhya Pradesh.......... 37
Summary of Product Marketing ......................................................................................... 41
Benefit-Sharing from Community Forestry in India .......................................................... 42

7. Unlocking Opportunities for Forest-Dependent People: Policy and Program Options.. 45

Introduction ........................................................................................................................ 45
Options for Reform............................................................................................................. 45
Strengthening the Forest Resource Tenure and Management Rights of Communities47
Strengthening Support Systems for Improved Forest Management, Monitoring and
Control ........................................................................................................................... 53
Improving the Market System for Forest Products............................................................. 60
Effective and Flexible Institutional Models........................................................................ 67
Potential for Welfare Gains from Proposed Reforms ......................................................... 73
Priorities and Phasing of Reform Options .......................................................................... 74

VIII. Conclusions........................................................................................................................ 78

References ................................................................................................................................... 79

List of Tables
Table 2.1. Forest ownership in Selected Countries (percent) ................................................. 4
Table 2.2. Forest Cover in India, other Countries in South Asia, and other Regions, 2000 ... 5
Table 2.3. Secondary Forest Industry in India ........................................................................ 7
Table 2.4. National JFM Characteristics.............................................................................. 12
Table 3.1. Historic Forest Tenure Rights in Assam, Jharkhand, and Madhya Pradesh ........ 16
Table 4.1. Characteristics of Households Deriving Low, Medium, and High Proportion
of Income from the Forest................................................................................. 24
Table 5.1. Working Plan Approval in Focal States............................................................... 29
Table 5.2. Field staffing of Forest Departments in Assam, Jharkhand, and
Madhya Pradesh................................................................................................ 33
Table 5.3. Returns to Alternative Land Uses in Assam ........................................................ 36
Table 6.1. Benefit Sharing Schemes in Assam, Jharkhand, and Madhya Pradesh ............... 43
Table 6.2. Mean Revenue and Expenditure in Selected states, 1999-2000 (Rs per hectare) 44
Table 7.1. Forest Rights Regimes without Land Title in Selected Countries ....................... 49
Table 7.2. Economic Returns from Improving the Efficiency of Nontimber Product
Production ......................................................................................................... 62
Table 7.3. Nation--Fiscal Systems in Selected Countries ..................................................... 66
Table 7.4. Options for and Phasing of Proposed Policy and Program Reforms ................... 75

List of Figures
Figure 2.1. Contribution of Forestry/Logging, and Agriculture to Indias GDP,
1982-2001 ........................................................................................................... 6
Figure 2.2. Contribution to GDP of Logging and Forestry Services in Selected
Indian States, 2001............................................................................................. 6
Figure 2.3. Projected Supply of and Demand for Fuel and Timber in India, 1996-2006 ........ 8
Figure 2.4. Plan Expenditures by the Ministry of Environment and Forest Management,
1992/93 - 2002/03 ............................................................................................ 10
Figure 2.5. Breakdown of Spending on Forestry and Wildlife by the Ministry of
Environment and Forests, 2002-03 .................................................................. 11

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 Figure 2.6. Real State Forestry Expenditures, Assam and Madhya Pradesh 1995-2002....... 11
Figure 4.1. Sources of Permanent Income in Jhabua, 2001. .................................................. 23
Figure 4.2. Share of Permanent Income of Selected Natural Resources in Jhabua, 2001 .... 23
Figure 7.1. GIS Mapping to Support Village Land-Use Planning, Karnataka Watershed
Development Project........................................................................................ 57

List of Boxes
Box 2.1. Pressures on Indias Forests ................................................................................... ..5
Box 2.2. Opportunities for Smal-Scale Producers Created by Global Forest Transitions .... 13
Box 3.1. Crafting Effective Forest Resource Rights............................................................. 17
Box 3.2. Impact of Transit Rules in Jharkhand..................................................................... 18
Box 4.1. The Unrealized Potential of Timber for Increasing the Income of Forest
Dwellers .............................................................................................................. 24
Box 5.1. Field Realities and Operating Constraints facing District Forest Officers ............. 34
Box 7.1. Critical Enabling Conditions to Unlock Forest Values for Forest-Dependent
People.................................................................................................................. 46
Box 7.2. Terms of Reference for National Forest Commission............................................ 47
Box 7.3. Opportunities to Advance Community Tenure Security ........................................ 51
Box 7.4. Mapping Customary Land Tenure in Canada and Indonesia ................................. 51
Box 7.5. Social and Institutional Elements of an Operational Manual ................................. 55
Box 7.6. Why Consolidate Forest Committees? ................................................................... 55
Box 7.7. Options for Conducting a Community Forest Inventory........................................ 57
Box 7.8. SMART Indicators for Monitoring Forest Livelihoods. ........................................ 59
Box 7.9. Contract Farming in India. ..................................................................................... 61
Box 7.10. Lessons from Andhra Pradesh for Improving Forest Livelihoods ........................ 62
Box 7.11. Strengthening Producer Organizations in Mexico ................................................ 64
Box 7.12. Extending the e-Choupal Concept to Forestry ...................................................... 64
Box 7.13. The Madhya Pradesh Lok Vaniki Initiative .......................................................... 68
Box 7.14. International Finance Corporation Support for Partnerships between
Communities, Farmers, and Industry................................................................. 69
Box 7.15. Carbon Financing in Community-Based Forestry in India ................................... 70
Box 7.16. Options for Delivering Rural Development Service in JFM................................. 71

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 VOLUME II

Appendixes & Statistical Tables

Appendix 1. Description of Study Methods in Jharkhand, Assam, and

Madhya Pradesh ..............................................................................................1

Appendix 2. Structure of the Indian Secondary Forest Industry ........................................ 11

Appendix 3. Fiscal Analysis of the Forest Sector .................................................................. 19

Appendix 4. National and State Legal and Policy Frameworks .......................................... 23

Appendix 5. Community Livelihoods in Assam, Jharkhand and Madhya Pradesh..........33

Appendix 6. Community Forestry Institutions in Maharashtra.......................................... 48

Appendix 7. Forest Management Planning Systems.............................................................49

Appendix 8. Linking Overstory Management to Nontimber Forest Production ...............52

Appendix 9. Market Analysis for Selected Products and States.......................................... 54

Appendix 10. Forest Fiscal Systems and Analysis.................................................................. 71

Appendix 11. Preliminary Economic Appraisal of JFM Forest Management Options .... 76

Appendix 12. Community Forestry Models and Forest Poverty Pathways.........................78

Appendix 13. Poverty Impact Monitoring System................................................................80

Appendix 14. Institutional OptionsRoles and Responsibilities for Key Actors in

Reformed Community-Based Forestry ...................................................... 91

Appendix 15. What is the Potential for Increased Revenues from Community-Based
Forestry?.... ..................................................................................................93

References................................................................................................................................... 100

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 Acknowledgments
This report represents a major step by the World Bank toward improving the understanding of Joint
Forest Management (JFM) in India. It describes how JFM is evolving and identifies reforms that could
enrich both forest conservation and forest livelihoods. The reports findings will contribute to ongoing
policy dialogue and reform related to watershed development at the national and state level.

The report was prepared by Grant Milne, Barbara Verardo, and Reena Gupta, under the general guidance
of Adolfo Brizzi, of the South Asia Agriculture and Rural Development (SASAR) of the World Bank.
The report draws on seminal literature from Indian and global community forestry, and background
papers for Assam, Jharland, and Madhya Pradesh (available on request). These reports were prepared by a
team of national and international consultants that included Robert deKock (resource assessment and
planning systems), Owen McIntyre (international law), Alan Ogle (forest marketing systems), Peter
Schatens (community forest management), Sanjay Upadhyay (legal and policy structures), and the Energy
and Resources Institute of Delhi (social and institutional review). Moeko Saito of the Agriculture and
Rural Development of the World Bank, provided material on Bank experiences in community forestry in
other regions. Urvashi Narain, of Resources for the Future, contributed valuable ideas and analytical
material on forest livelihoods in Madhya Pradesh. John Spears, World Bank consultant, provided
information on International Finance Corporation (IFC) programs related to small-scale forest enterprises
and communities. Brian Belcher and Deep Pandey, of the Centre for International Forest Research
(CIFOR), provided input on forest livelihoods and monitoring. The authors acknowledge the
indispensable contributions made by forest department staff in Assam, Jharkhand, and Madhya Pradesh.
They provided excellent support and cooperation throughout the field work phases and were a sounding
board for new ideas and concepts for reforms in informal follow-up discussions.

Valuable suggestions were also gathered during presentations in December 2004 to the National Forest
Commission, meetings with rural development agencies, and a national workshop with representatives of
civil society. The team is indebted to the Ministry of Environment and Forests (MOEF) in Delhi for input
and for helping organize these meetings.

Grant Milne, Task Manager, supervised the project, with superb administrative support from Jai
Mansukhani, Lilac Thomas, and Yoshiko Masuyama (SASAR). The report benefited significantly from
reviews and comments by staff and managers in SASAR, including Adolfo Brizzi, Peter Jipp, Barbara
Verardo, Dina Umali-Deininger, Madhavi Pillai, and Martien Van Nieuwkoop. Seven peer reviewers
offered extremely constructive input on a revised draft: N.C. Saxena, former Secretary of the Planning
Commission, government of India; Augusta Molnar and Arvind Khare, Forest Trends, Washington, DC;
James Smyle, Senior Natural Resources Management Specialist, Latin America and Caribbean Region,
World Bank; and Gerhard Dieterle, Daniela Goehler, and Jill Blockhus, Agriculture and Rural
Development Forestry Group, World Bank. The task team also acknowledges helpful comments from the
World Bank India Management Team; Eric Brusberg, Lead Social Development Specialist, South Asia
Social and Environment (SASES); Jan Bojo, Advisor to the Vice-President, Environment and Sustainable
Social Development (ESSD); and four anonymous external reviewers in India. The contribution by
Neeraja Adidam, of the Indian Forest Service, on a short-term placement in the World Bank as part of a
Fulbright Scholarship, is much appreciated. Professional editing services were provided by Barbara
Karni. Finally, the team acknowledges the financial support provided by Dutch, Irish, and International
Development Agency trust funds.

The team gratefully recognizes the collaboration of the many people who assisted in preparation of this
report. The opinions presented here and any errors are the sole responsibility of the authors and should not
be attributed to the individuals or institutions acknowledged above.

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 EXECUTIVE SUMMARY

This study by the World Bank indicates that forests offer vast potential for poverty reduction and rural
economic growth in India while also supporting critical national conservation goals. Forestry is the
second largest land-use in India after agriculture. An estimated 275 million people in rural areas depend
on forests for at least part of their livelihoods. Forest dwellers, which include a high proportion of tribals,
are among the poorest and most vulnerable groups in society. The government of India has adopted Joint
Forest Management (JFM) as a principal approach for community-based forestry. The program now
covers 27 percent of the national forest area across 27 states, and encompasses 85,000 village committees.
Over the past decade, the JFM model has been evolving from an approach heavily oriented towards
commercial timber managed by state forest departments (with communities providing labor), to an
approach more supportive of forest conservation with communities sharing benefits in return for assisting
with limited management activities.

Although this transition has been successful by some measures, most communities still fail to utilize the
full potential of forests to improve local livelihoods. Forests are mainly used as a safety net during
difficult economic periods, or for seasonal subsistence products like fuelwood and fodder. For
communities to benefit from the untapped potential of forests, wide ranging and carefully phased reforms
are required at both the national and state levels addressing: 1) stronger forest rights and responsibilities
for forest communities; 2) more effective management systems targeted at communities involved with
forestry; 3) improved access to more efficient market systems for major and minor products; and 4) more
effective and flexible institutions and capacities. At the same time, programs need increased development
focus to broaden livelihood opportunities.

The potential benefits from such a reform program at the community level, coupled with gains in forest
productivity, are enormous. For the area presently under JFM alone, a simple analysis shows that total
forest income from commercial timber, bamboo and non-timber products on improved forests could rise
from an estimated US$222 million in 2004 to approximately US$2 billion per annum in 2020. Modest
value addition could increase commercial incomes by another US$220 million in 2020. Many
communities could earn up to Rs1 million or more in cash income each year, using existing technology
and management options without compromising forest sustainability and the multiple values associated
with forest resources. Communities would continue to enjoy subsistence benefits from the forest worth
another US$1.1 billion per annum. Ecological and eco-tourism values from current JFM forests could be
as high as US$1.7 billion by 2020.

A reform agenda as outlined above emphasizes the challenges facing policy makers in further evolution
of JFM towards a model where communities are more empowered with stronger forest rights, clear and
consistent rules, and access to favorable markets. Such a model would position forest departments to
focus more on core business functions such as technical advisory service delivery, facilitation of
partnerships with communities and the private sector, and forest monitoring. A prudently phased program
of reforms at the state and national level should be considered as part of a dialogue to build a national
consensus on the direction, pace and scale of community-based forestry evolution in India. These kinds of
reforms will require significant time, finances, and technical support, particularly to build the requisite
capacities in communities, forest departments, and other relevant agencies. These reforms will also need
strong political will and major commitments to foster awareness and craft a common vision among a
diversity of stakeholders. By taking these bold steps however, poor social groups living in forest
communities will ultimately see an improvement in their livelihoods as they become better integrated into
a more productive and competitive sector of the rural economy while also safeguarding national forest
conservation goals.

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 This report is designed to assist senior Indian policymakers in evaluating policy and program options that
could help many communities gradually become more empowered to use forests as one means of moving
out of poverty. By identifying options for shifting roles and responsibilities among key actors, it
contributes to the ongoing policy debate over how Joint Forest Management (JFM) should continue to
evolve in India. The report focuses on the underlying legal and policy framework, institutions, resource
assessment and management systems, and market systems.

The report draws heavily on detailed background studies in Assam, Jharkhand, and Madhya Pradesh,
three states that represent a good cross-section of JFM history, scale and implementation progress. It is
also informed by a wide array of national and international research and case studies.

Forest Sector Overview

Forestry is the second-largest land use in India after

agriculture, covering about 641,130 square kilometers, or 22
Forests are under intense
percent of the total land base. Roughly 275 million poor rural
pressure and the country faces people in India27 percent of the total population depend on
significant timber and fuelwood forests for at least part of their subsistence and cash livelihoods,
deficits. At the same time, which they earn from fuelwood, fodder, poles, and a range of
forests are important for rural nontimber forest products, such as fruits, flowers, and medicinal
livelihoods. plants. Seventy percent of Indias rural population depends on
fuelwood to meet domestic energy needs. Half of Indias 89 million
tribal people, the most disadvantaged section of society, live in forest fringe areas, and they tend to have
close cultural and economic links with the forest. Forestry and logging accounted for just 1.1 percent of
Indias Gross Domestic Product (GDP) in 2001; adding nonmarket benefits of environmental services,
subsistence fuelwood, fodder, and many other nontimber forest products, doubles the GDP contribution.

An estimated 41 percent of Indias forest cover has been degraded to some degree in the past
several decades. Average forest productivity is about one-third of potential rates. Timber and fuelwood
demand is well above the sustainable harvest level. The national government is committed to conserving
the forest and developing new forests to meet the goal of increasing forest cover to 33 percent of the land
area by 2012. To meet this goal, expenditures from the center have increased by 8.1 percent a year over
the past decade, mainly to support forest improvements. Budgets for critical core business functions, such
as policy, research and development (R&D), and forest inventory, are very low by comparison. State
budgets, while rising slightly in real terms, mainly cover recurrent costs.

Before and immediately after Independence in 1947, forest

management in India focused on commercial plantations, with little
Over the past several decades, regard for the development needs of forest communities. In the early
the focus in forestry has shifted 1980s, a strong shift toward conservation occurred, with the Forest
toward conservation. JFM is now Conservation Act. As a supporting strategy, West Bengal and a few
a key policy thrust. other progressive states experimented with allocating a specific area
of forest along with limited management responsibilities to
communities in return for a share of forest revenues from timber and
better access to nontimber forest products. The National Forest Policy of 1988 led to a policy circular in
1990 that formally adopted this model as JFM. It is now a principal element of forest management
strategies in India, with a primary focus on protection and conservation goals. Since 1988, JFM
operations have continued to evolve, with greater attention paid to rural livelihoods. Programs currently
span 27 states, represent 85,000 village committees, and cover more than 17.3 million hectares of forest
land.

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Indias community-based
forestry model is evolving, but
most communities are not
tapping the full potential of
forests to improve their
livelihoods and reduce poverty.
The current JFM model is weighted in favor of state forest
department control over planning, management, investment,
harvesting, and marketing. Most communities participating in
JFM fail to tap the potential of forests to improve local livelihoods.
Forest communities still tend to use forests mainly as a safety net
during difficult economic periods, or for seasonal subsistence
products, such as fuelwood and fodder. For communities to capture
more of this untapped potential, wide ranging and phased reforms
are required at both the national and state levels.

The potential benefits from improvements in forest

The potential economic benefits
productivity, coupled with further reforms around
community-based forestry are massive. Considering only the
from improved forest
area currently under JFM, total forest income from commercial
productivity and policy reforms timber, bamboo and nontimber forest products could rise from an
for community forestry in India estimated $222 million in 2004 to about $2 billion a year in 2020
are huge, both for people and based on modest assumptions about forest productivity gains and
governments. commercial output from forests managed by communities.
Further, with modest value addition and quality enhancements,
annual commercial incomes could increase by $220 million in 2020. Many communities could earn up to
Rs1 million or more in cash income each year, using existing technology and management options
without compromising forest sustainability and the multiple values associated with forest resources.
Given improved technology and better market access, many communities could evolve higher level value-
added activities that generate even greater returns. Communities would continue to enjoy subsistence
benefits from the forest; the net value of domestic fuelwood and fodder could be worth another $1.1
billion a year. Ecological and ecotourism values from current JFM forests could be as high as $1.7 billion
as formerly degraded forests mature and begin to generate important conservation benefits.

Many stakeholders at both the state and national levels agree

The timing is right for a renewed that strengthening forest rights and management
national debate on community
responsibilities of communities could help unlock more of the
value inherent in Indian forests and boost local livelihoods
forestry and reform agendas.
while also supporting forest conservation policy goals. A range
of opinions exists however, on how this transition can be
achieved, the pace at which it should occur, and what the immediate and longer term policy and program
priorities should be to make this transition a reality.

A number of recent events suggest the timing is right for a broad, national debate on community
forestry, leading to a program of progressive reforms. First, the government of India has
commissioned a National Forestry Commission, chaired by the former chief justice of the Supreme Court,
to present a report to Parliament in early 2006 addressing a range of forest sector issues, including
community forestry. Second, a strong debate is emerging over proposed national legislation that would
recognize historic land and resource rights of many tribal people living in scheduled areas in India. Third,
the change in national government in 2004 has focused increased attention on a development agenda
aimed at rural economic growth.

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 Community-Based Forestry in India: Key Issues

Indias legal and policy environment for forestry is complex

and challenging. Under Indias Constitution, national and state
Legal issues associated with land
governments share jurisdiction for forestry. The Indian Forest Act
and forest rights, the free of 1878 and Indian Forest Act of 1927 emphasized commercial
movement of forest produce, and timber production. The Forest Conservation Act of 1980 and the
conflicts with the Panchayat Raj 1988 National Forest Policy shifted the pendulum strongly toward
(Scheduled Areas) Act impede forest conservation and JFM. This conservation direction was
the evolution of community- complemented by the 1972 Indian Wildlife (Protection) Act.
based forestry.
The central government has issued numerous and in many cases
progressive policy circulars on JFM since the 1980 Act, but
implementation has been slow. States apply a set of laws to forests and forest management, largely
following the provisions of the Indian Forest Act of 1927. A number of critical legal and policy issues
exist, including the erosion of historic land and forest resource rights held by many communities and
tribal people, the weak legal foundation for JFM in many states, poorly defined resource rights for
participating communities in JFM agreements, restrictive rules on the harvesting and transport of many
forest products (despite guidelines by the Ministry of Environment and Forests in 2004), and conflict
resolution mechanisms that are too heavily weighted in favor of the forest department.

Another key issue relates to decentralization. The 73rd Constitutional Amendment of 1992 supports the
governments goal of decentralizing governance through panchayat raj institutions. Under the Panchayat
Extension to Scheduled Areas Act, 1996 (PESA), gram sabha (village assemblies in scheduled areas)
were endowed with powers over community resources, including ownership of minor forest produce.
These included the power to prevent alienation (where lands are expropriated or otherwise reallocated to
other users) of land in the scheduled areas, to take appropriate action to restore any unlawfully alienated
land of a scheduled tribe, and to manage village markets. A number of potential areas of conflict and
uncertainty exist between state forest legislation and PESA that need to be better understood and
addressed.

Forest fringe communities are among the poorest in society. In

The current JFM model does not
fully recognize the unique needs
and characteristics of forest
dwellers, who are among the
poorest groups in society.
effectiveness of project thrusts and their impact on poverty.
many of these communities, tribal people represent a significant
share of the population. They depend on forests for their cultural,
spiritual, and to varying degrees economic needs. The decline in
traditional institutions has adversely affected forest dwellers.
Government devolution programs and sector-driven initiatives
such as JFM do not usually recognize the unique characteristics of
forest dwellers, including tribal people, which can reduce the

Communities, including those with large tribal populations, often view JFM as imposing external rules
that ignore existing management institutions governing prudent uses of natural resources that incorporate
local knowledge and cultural contexts. Many villagers view JFM formation as a top-down,
nonparticipatory process that can exacerbate existing social tensions between tribal and nontribal people.
Meaningful participation of communities in the micro-planning process is often quite weak, with
insufficient regard given to peoples subsistence forest requirements and broader development needs.

Forestry is not usually a high development priority for rural people; the most pressing needs for
development tend to be improved agricultural production through irrigation and extension services; safe
drinking water and simple hand pumps; assistance with village-based income generating activities; access

xi
 to electricity; improved roads and better transport facilities; better access to education and health
facilities. Rural development programs for remote forest communities appear to be poorly coordinated
and suffer from anemic service delivery.

Agriculture, labor, and forests all contribute to rural livelihoods in forest fringe areas. Subsistence
products, particularly fuelwood and fodder, are the main contributors to local livelihoods from the forest.
Rural people generally earn very little cash income from forests, due to poor roads, a focus on low-value
products, poor forest quality, and weak market linkages.

Several key issues around management planning and

resource assessment appear to be hindering more
Current forest management systems
progressive forest management with communities: First,
need significant strengthening to
resource assessment systems need strengthening, even in
monitor forest change and support states such as Madhya Pradesh, where forest inventory and
further transitions in community- growth and yield systems are reasonably robust. These
based forestry. systems are particularly weak at the community level,
especially for nontimber forest products. Second, mapping
capacities vary across state, but all states examined require significant incremental investments in
financial and technical resources. Third, deficiencies in forest resource assessment systems and mapping
make it difficult for state forest departments to effectively monitor how the forest is changing over time.
Routine monitoring of forest livelihoods and poverty is not conducted. Forest departments focus on
meeting annual targets rather than impacts and outcomes. Fourth, the geographic area of responsibility
and the range of responsibilities for field staff are much greater than in many other countries. More
creative options for forest department staffing and mandate need to be considered for field operations that
build on resource realities and comparative advantages of forest department field staff, private
consultants, non-government organizations, and communities. Fifth, community forestry needs more
guidance from financial and economic analysis, yet there is little technical capacity in state forest
departments and the Ministry of Environment and Forests. Five areas are emerging where economics
analyses could support policy reform and program implementation: reviewing alternative tenure and
access rights systems and their relationship to forest livelihoods conservation, forest productivity, and
public expenditures; evaluating the economics of silviculture for community-managed forests; assessing
local incentives by allocating communities good-quality forest along with degraded land; analyzing the
costs and benefits of farm forestry; and reviewing current benefit-sharing schemes.

A range of forest product marketing models exist in India, and

State forest marketing
institutions tend to be inefficient
and limit communities from more
direct market access that could
yield higher incomes.
they are continuing to develop. However, for many timber and
nontimber forest product species with commercial value, market
systems are still largely dominated by state monopolies
supported by a restrictive legal and regulatory framework.
Private sector involvement in forest resource establishment and
marketing appears to be limited in most states.

An analysis of several major product groups illustrates a range of critical issues and opportunities in forest
product market systems. Communities have very little capacity, and are given very limited space to
engage in direct marketing of timber, which could open significant opportunities for forest revenues while
also reducing the need to maintain costly state institutions in harvesting and marketing. With nontimber
products such as kendu leaf, market forces are not allowed to operate at all points along the value chain.
Collectors are simply paid a wage per bag, largely divorced from market signals about product quality.
Bamboo, a major product in Northeastern India, offers excellent opportunities for private growers to

xii
 supply pulp mills. In Assam, however, a complex, cross-subsidized purchasing scheme distorts markets.
Meeting fuelwood demand and improving livelihood opportunities requires innovative solutions on both
the supply and demand side. Medicinal plants and aromatic oils offer exciting promise for the future in all
states. Assam and Madhya Pradesh provide examples of good progress in developing demand-driven
market systems through partnerships between communities and public and private sector interests.
Approaches in these two states and others, such as Andhra Pradesh, illustrate that forest departments do
not need to control the market but can instead play a supportive and facilitating role.

Several problems with the forest fiscal system in India hinder transformation of community
forestry. First, the JFM benefit-sharing system is overly complex, has high transactions costs, and is
focused on a narrow range of revenue generation options at the primary resource level. Second, the policy
direction for this approach is not clear, and there are contradictions with economic theory. Furthermore,
while most commercial products harvested by communities are subject to benefit sharing, a few can be
marketed privately, with the state collecting no revenue. Third, average revenue generation from primary
forest production by the forest departments is low, reflecting poor commercial opportunities by
communities and suboptimal forest productivity.

Policy and Program Options for Unlocking Opportunities for Forest-Dependent

People

Despite the notable achievements of JFM in the past two

Bold but prudent reforms of
decades and many highly skilled and dedicated staff, the
current JFM model has not adapted quickly enough to keep
four critical enabling factors are
pace with the rapidly changing domestic and global business
needed to help empower and policy environment. Forests are not a major contributor to
communities to use forests as cash livelihoods in most communities, but the potential exists to
one pathway out of poverty. increase commercial forestbased activities as one step along the
pathway out of poverty. Bold but prudent policy actions are
needed at the national and state levels to shift JFM from a
command and control model with a strong conservation focus to a more commercial and livelihood based
approach that empowers communities. Reforms need to focus on four critical enabling factors: achieving
more secure tenure and management rights for forest dwellers; strengthening forest management,
monitoring, and control systems; providing access to more efficient market systems; and developing more
effective and flexible institutional models. Concurrently, programs need a stronger development
orientation to broaden livelihood opportunities.

Achieving More Secure Tenure and Management Rights for Forest Dwellers

The Ministry of Environment and Forests constituted a National

Forest Commission in 2003, chaired by the former chief justice of
National legal and policy reforms the Supreme Court, to review the working of the forests and
should be guided by the wildlife sector, including the national legal and policy framework.
forthcoming report of the That commissions report and its recommendations for national
National Forestry Commission. policy and legal reform are expected to be issued in early 2006. In
the meantime, it is important that India consider developing a
national consensus on the legal and policy framework governing forestry. To build this consensus, public
input beyond what the commission has already gathered may be required, possibly led by a national
steering committee comprised of government and broader civil society.

xiii

States need to strengthen
forest policies and grant
stronger land or resource rights
to communities.
Individual states need to examine practical options for legal and
policy reform. In some cases this may mean amending existing
law; in others it may mean drafting a new consolidating Forest
Act. Both options must be supported by a more effective
regulatory framework. Specific reform options to consider include
the following:

Strengthen current forest policies. Policy should be a dynamic process, with adjustments in tune with
changing social, economic, ecological and cultural factors. Using a participatory process,
policymakers should revise state forest policies to recognize historical tenure-based forest resource
rights and lay out a new community forest management framework with stronger forest resource
tenure for communities. The 2004 Assam forest policy is a good model to examine as a starting point;
it is progressive, innovative, and based on a reasonable level of public input. The Department for
International Development (DFID) is supporting state forest departments in Orissa and Himachel
Pradesh to also craft comprehensive forest sector strategies and policy.

Establish stronger resource rights for communities. New approaches are needed in three broad areas.
Where historic forest resource rights already exist, they should be clearly acknowledged in policy,
codified in law, and recorded on maps. A number of countries, such as Brazil, have successfully
addressed this situation. Where no historic forest resource rights exist, global experience can help
guide reforms. Although the most efficient option might be to assign land title to communities (or
households), this is a long-term and politically sensitive issue. As an interim measure, tenure over
resource rights could be granted for a fixed term, giving the community specific contractual rights
and responsibilities over the forest. China has had successful experiences with this approach. Another
option is to grant 20 to 25 year tenure, renewable and extended in five-year increments, based on the
community meeting clear performance standards for forest stewardship. This model has worked in
Latin America and Canada. Tenure rights for nomadic tribal people also need to be addressed. State
governments may wish to establish a high-level forest rights review body, chaired by the chief
ministers office, with appropriate representation from line ministries, communities, and tribal groups.

Revise implementing mechanisms for community forestry. Community-based forestry as represented

by JFM needs a stronger and more consistent legal footing, either linked to an existing state law, as in
Assam, Uttaranchal and Uttar Pradesh, or merged with new consolidating forest legislation. In the
absence of land title, forest tenure with communities on state land needs to be a legally binding
agreement, preferably as a management contract between the community and state. A more flexible
forest user group model is required that is better suited for existing community institutions and that
also respects PESA provisions in scheduled areas. The government of India and the states should
consider a national review of community institutions and the PESA interface to better understand
linkages and legal and regulatory constraints, identify a roadmap for reforms, and develop a program
for capacity building and education in relevant line agencies. Recent global experience from Canada,
Nepal, Latin America, and parts of Africa provide useful models.

Reform the harvesting and transit permit regime on selected forest products. Some states have made
progress in relaxing these rules based on 2004 guidelines from the Ministry of Environment and
Forests, but further reforms are still needed to improve efficiency. One option would be for state
governments to convene an independent panel of stakeholders, including forest departments, private
forest farmers, JFM committee members, local sawmill owners, major buyers of nontimber products,

xiv
 local development banks, and interested community service organizations. This process would benefit
by the Ministry of Environment and Forests issuing a list of only those species that require a more
restrictive regulatory framework based mainly on international biodiversity conservation rules, such
as Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Other species could then be taken off transit permit lists by states, in line with improved monitoring
systems to track movement of high-value forest products.

Strengthening Forest Management, Monitoring, and Control Systems

To facilitate a gradual and measured transfer to communities of

Community-based forestry must be
supported by more effective
management, planning, mapping, and
research systems that meet local
needs.
more rights and responsibilities over forest management, a
number of reforms are needed in underlying management,
monitoring, and control systems. Reforms should be guided by
a comprehensive forest sector strategy that sets out a framework
for forest sector development with a focus on conservation and
rural livelihoods improvement. Key priorities for reform include
the following:

Strengthen planning approaches for community forestry. As community-based JFM in India

expands and evolves, it will gradually account for a more significant share of the forest area in
many forest divisions. Current top-down working plans will become less relevant and could be
transformed into more concise guiding strategic documents. Better information is required on the
forest resource base and changes, economics and markets, and community social capital and
institutions. Consideration should also be given to incorporating a reasonable level of public input
to working plans, possibly through the Forest Development Agency structures. Community-level
micro-planning must be guided by a comprehensive operational manual, which could be based on
experience in community-driven development programs in other sectors in India, such as
watershed development and District Poverty Initiative Programs. Manuals produced in Assam
and Madhya Pradesh for JFM also show promise as models. Micro-planning should also consider
clustering communities where appropriate to build on tribal institutions and take advantage of
economies of scale for planning and program implementation at a watershed or landscape level.

Increase investments for resource assessment and mapping systems. The underlying resource
assessment and monitoring system must be significantly strengthened at the division and
community levels to support further shifts in rights and responsibilities to communities. These
improvements must be underpinned by significant investments to strengthen growth and yield
information and models. Models need to be developed for forest species of interest and value to
communities rather than traditional just commercial timber species. There are considerable
opportunities to use communities to gather baseline and change data. Global experience in this
area can provide useful lessons to build on. Enhanced monitoring systems must also account for
changes in livelihoods from forest-based activities. Ongoing Bank-funded work in Jharkhand is
developing simple tools that could easily be replicated in other states.

Review and refocus research and development. Although some states, such as Andhra Pradesh
and Madhya Pradesh, are gradually reorienting R&D to nontraditional timber and nontimber
forest product species to meet community needs, national R&D still focuses largely on
plantations and traditional commercial timber species. To improve the linkages between R&D,
dissemination and subsequent uptake by communities across India, the Ministry of Environment
and Forests and state forest departments may wish to consider developing a new national strategic
plan for R&D, oriented toward community forestry transitions and priorities.

xv
 Providing Access to More Efficient Market Systems

Forestry appears to be lagging far behind agriculture marketing

Market systems for community systems, which have been subject to a series of reviews and major
reforms in recent years. One of the greatest challenges in forestry
based forestry need to be
market systems is to change the prevailing mindset that forest
liberalized and more aligned with
products, particularly many nontimber forest products, are
ongoing transitions and reforms different from agricultural commodities and that marketing
in agriculture marketing. therefore has to be managed by the forest department. This
attitude is slowly changing in some states, such as Andhra
Pradesh and Assam, but it has not yet reached across all forest products. Some of the key priorities for
reform of market systems include the following:

Develop new approaches for market access by communities. Communities and farmers wanting
to sell commercial forest products outside of local markets should have the option of using
contract sales or outgrower schemes rather than state institutions. Even where JFM rules provide
space for greater direct marketing, little capacity exists among communities to access these
markets or obtain fair prices. These new approaches can reduce the risk and uncertainty to sellers
while ensuring purchasers of a more reliable supply over a specified time. Purchasers may also
provide credit support, inputs, storage facilities, and technical advice to producers as part of the
contract agreement, factoring these benefits into the negotiated price. Nontimber forest products
that are not listed for special harvesting or transit permits offer great potential for these new
market options; there are already a growing number of examples from states such as Andhra
Pradesh, Assam, and Madhya Pradesh. For timber, bamboo, and fuelwood, the experience has
been less positive, yet there is no compelling reason why, after a period of transition and capacity
building, new marketing approaches cannot be extended to communities and small farmers as
legal suppliers of these products. Opening up markets will require some states to amend forest
legislation and possibly Agricultural Produce Marketing Committee Acts. Concerns over
potential loss of revenue to forest departments (and states) by communities and farmers selling
their timber outside of the department monopoly structures can be addressed by reviewing the
current forest fiscal system and developing alternative sources of revenue, such as better
collection of downstream sales or income taxes from commercial forest products. Forest
sustainability can be improved through a more robust monitoring program in addition to stronger
tenure rights for communities. Latin America, particularly Mexico, has had good experience with
market liberalization and fiscal system reforms of community forestry.

Strengthen the market power of communities. Producer organizations (associations, federations,

cooperatives) at the community level need to be nurtured, based on targeted capacity building. In
addition, state-level marketing federations of forest communities should be encouraged to
strengthen their market position, facilitate the establishment of storage areas, train for value
addition and more sustainable harvesting methods, and allow consolidated consignments of
timber, bamboo, fuelwood, and nontimber forest products to be sold directly by communities to
large processing or marketing firms through auctions or contract agreements. Producer
organizations may need assistance from the state to develop, but within a reasonable time period
these institutions should have a fully independent federation at the apex, with elected officials and
a board of directors, a majority of whose members are not from the forest department.

Improve extension and technical services. Most state forest departments are weak in extension
and technical services, particularly for agro-forestry, nontraditional timber species, and nontimber

xvi
 forest products. New models must be explored. Partnerships with the private sector for
outgrowing schemes and outsourcing some of this work to the private sector and community
support organizations could be considered. Andhra Pradesh and Madhya Pradesh have made
reasonable progress toward helping villages improve sustainable nontimber forest production and
harvesting, incorporating modest value addition, and building on local knowledge systems.

Enhance market information sharing and networks. States need to strengthen mechanisms for
gathering and sharing market intelligence within government line departments and with
communities and forest farmers. One policy option to explore is extending the highly successful
e-Choupal concept in agriculture to bring Internet-based forest product market information to
communities. Another option is to extend the Agriculture Market Intelligence Network
(AGMARNET) to forestry, providing Internet-based market information sharing among
agriculture produce marketing committees in most states in India. Alternatively, a new forestry
network could be established with suitable private sector support. The Madhya Pradesh Minor
Forest Product Federation offers a good example of what kind of information a marketing web
site could offer.

Create national incentive programs to induce state marketing reforms. The government of India
should consider instituting a forest diversification program similar to the recently announced
scheme called Development/Strengthening of Agricultural Marketing Infrastructure, Grading and
Standardization. This program could induce large investments from the private and cooperative
sectors for setting up forest product markets, marketing infrastructure, and support services, such
as grading, standardization, and quality certification.

Developing More Effective and Flexible Institutional Models

Current staffing constraints in forest departments, coupled with limited, albeit slightly increasing
operating budgets, make a strong business case for refocusing staff on narrower core functional areas
around the goals of improving rural livelihoods and conserving the forest. Although these goals are
posited by Ministry of Environment and Forests, and many state governments, a new partnership model is
needed that recognizes inherent comparative advantages and constraints among forest departments,
communities, private forestry consultants, and community support organizations. Specific
recommendations include the following:

Forest departments need to review and rationalize their

role. State forest departments need to strengthen capacity
Targeted training and investment in five core areas: forest management technical advisory
programs should be implemented services; R&D and technology transfer; forest monitoring,
to help forest departments mapping, and information management; forest marketing
rationalize their roles and focus technical services; and economics, policy, and planning.
more on facilitation and technical This revised focus would support a model in which
advisory services. communities, in conjunction with panchayats, gradually
assume responsibility for micro-planning, plan
implementation, harvesting, marketing, and protection, with technical guidance from the forest
department or private consultants. State forest departments should consider a strategic planning
process to guide internal organizational transformation and rationalization.

xvii
 Communities and other local institutions must be willing
and capable of assuming these new rights and
Many communities can assume a responsibilities. The proposed transition must be
greater role in forestry measured and prudent in order to allow communities,
management and marketing, but local authorities, and other supporting institutions, such as
substantial time and investments producer organizations, to gain sufficient experience, new
will be needed to build strong skills, and confidence. Capacity must be created to
local capacities and sustainable develop group consensus, enduring and capable
institutions. institutions, transparent rules and procedures, equity
among all groups, and to overcome the individual
tendency to free ride. Institution building should consider whether the current JFM model of co-
opting all adult villagers into the user committee is more sustainable than establishing a
committee made up only of villagers genuinely interested in forest management and with greater
dependency on the forest for livelihoods.

Building social capital requires a long-term commitment between the state and communities,
often with community support organization partners. This will take time and substantial financial
resources, but committing to improved social capacity building will allow state forest
departments to rationalize and direct limited resources on internal core business functions with
less fear of compromising forest conservation. Valuable lessons in building community
institutions and capacities can be gleaned throughout India from watershed programs and District
Poverty Initiative projects, among others.

Forestry associations need to be established for forest-based communities. Community forestry

associations are needed at the state level to facilitate community empowerment and level the
playing field in terms of power relationships with government. These institutions should grow
organically, but where interest is shown, a grant from the Government of India or external donors
could provide seed funding for a small office, equipment, membership drives, registration,
development of a data base, and the production of materials. The associations could then support
their apex office through modest annual subscriptions.

Information needs to be shared across institutions. An almost overwhelming level of published

and electronic material on community forestry exists in India, but it is widely scattered.
Stakeholders cannot easily build their knowledge bases or share experiences within India and
from other countries where community forestry has evolved. The government of India, in
partnership with appropriate community support organizations, the private sector, and
international organizations, needs to build a strong and sustainable multistakeholder community
forestry network. One option would be to strengthen existing national networks, such as the
Resource Unit for Participatory Forestry (RUPFOR). In addition to written and electronic
material, knowledge sharing through a well-funded, multiyear, and coordinated program of
national and international exchange visits is needed for people at different levels, including senior
policymakers, government officials, and community members. Opening up to other community-
based forestry experiences can be a powerful catalyst for change.

xviii
 Delivering integrated rural development services to
remote forest fringe communities will require new
To help lift forest communities models. Agencies such as tribal affairs, agriculture, and
out of poverty, community-based rural development need to play a more central role in rural
forestry needs to be better livelihood programs linked with community forestry.
integrated with rural livelihood Panchayat raj institutions need to become more
and development programs. integrated into rural development in forest communities
within their jurisdiction. To help identify and evaluate
options, a state-level review of rural service delivery programs in forest fringe communities is
suggested, led by the chief ministers office. State governments should also consider establishing
an advisory body on rural development and forestry at either the chief minister or forest minister
level, led by an independent senior chairperson, with senior representatives from key government
rural development agencies, tribal leaders, and selected community support organizations.

xix
 Glossary

Adivasi Indigenous ethnic groups outside of the mainstream of society, often

referred to as scheduled tribes. The latter refers to a government
policy that grants them certain affirmative action rights.
Bidi Country cigarette in India made with tobacco and rolled in a kendu leaf
Block A block is an administrative level of government between the panchayat
and the district.
Community A group of habitations or hamlets, managing its affairs in accordance
with customs and traditions
Crore Ten million units
Current Annual Increment The annual increment of wood for a forest in any given year.
District India is divided into states and states are divided into districts. Many
government development programs operate at the district level under the
district collector, who is the top civil servant at the district level.
Gram Panchayat Village-level elected body
Gram Sabha Gathering of all villagers within the jurisdiction of a gram panchayat
Joint Forest Management: A government program in which the state Forest Departments, which
officially control all Indian forest land, partner with local communities
to protect forests. Community members share the proceeds of timber
and other forest products as part of a joint agreement. Specific terms
vary by state.
Lakh One hundred thousand units
Mean annual increment Average growth rate of a forest, calculated as the total volume of wood
from tree establishment up to a given maturity age, divided by that age

Naxalites Insurgents operating in some Indian states waging an often violent

struggle for land rights and political objectives
Nistar The traditional rights of people living in forest areas to gather products
such as fuelwood, fodder, foods and medicines necessary for survival
needs.
Panchayat: A local unit of government covering a small number of contiguous
villages.
Scheduled areas Special areas notified in a series of legislations over the past several
decades that provides various protection measures for tribal groups

xx
Scheduled caste (SC) Low caste groups, also called dalit, untouchable, or Harijan, who
traditionally have been at the bottom of the social hierarchy in India.
Scheduled caste is the official and most socially acceptable term used
for these groups. Scheduled refers to government policy that grants
these groups certain affirmative action rights.
Scheduled tribe (ST) see Adivasi.
Silviculture An area of forestry dealing with the methods of establishing and
growing trees
Tribal: see Adivasi
Zilla panchayat District-level elected body

xxi
 1. Introduction

Joint Forest Management and Community-Based Forestry Models

Forestry represents the second-largest land use in India after agriculture, covering about
641,130 square kilometers, or 22 percent of the total land base (FAO 2005). The sector
contributes a little more than one percent to Gross Domestic Product (GDP). Forests also provide a
wide range of environmental and ecological benefits. About 275 million poor rural people in India
depend on forests for at least part of their subsistence and cash livelihoods, which they earn from
fuelwood, fodder, poles, and a range of nontimber forest products, such as fruits, flowers, and
medicinal plants. Seventy percent of Indias rural population depends on fuelwood to meet
domestic energy needs. Half of Indias 89 million tribal people, the most disadvantaged section of
society, live in forest fringe areas, and a significant percentage of Indias 471 million livestock are
sustained by forest grazing or fodder collected from forests.

Joint Forest Management (JFM) is now a principal forest management strategy in India. In
June 1990 the government issued a resolution that made it possible for state forest departments to
formally involve people in forest management through JFM 1 . In return for providing improved
forest protection, communities receive better access to nontimber subsistence forest products and a
share of net commercial timber revenues. The state retains most of the control and decision making
over forest management, regulation, monitoring, timber harvesting, and forest product marketing.
The government views JFM as a pivotal strategy for addressing the national policy goal of
achieving 33 percent forest cover by 2012. The main focus of JFM in India is forest protection and
conservation.

Some states initiated the JFM approach in 1990; others took much longer. JFM programs
currently span 27 states, represent 85,000 village committees, and cover more than 17.3 million
hectares of forest land. The program encompasses an estimated 8.3 million families, half of which
are scheduled castes and tribes (Bahuguna 2004). Most JFM communities use the surrounding
forests mainly as a safety net or for regular or seasonal subsistence production of fuelwood, fodder,
and minor nontimber forest products, such as fruits and medicinal plants. Commercial sales of
forest products by the communities are very limited and not well integrated into larger urban and
national markets.

JFM represents one model of community-based forestry in which the state engages with
communities in forestry. A variety of community-based forestry models exist. At one end of the
spectrum, governments own the land and forests, and implement most forest management and
marketing functions. At the other end, communities own the land and forests and are responsible for
most forest management and marketing functions. The current JFM model in India falls between
these two positions and is continuing to evolve. Opinions in India differ regarding how far this
evolution should go, the pace at which it should occur, and what the immediate and longer term
enabling policy and program priorities should be. The issues are complex, emotionally charged, and
highly political; some have resulted in legal challenges brought before the Supreme Court

1
Following the National Forest Policy of 1988, the Government of India issued a resolution in June 1990,
making it possible for state forest departments to formally involve people in forest management through Joint
Forest Management (JFM).

1
International experience suggests that when communities are empowered with greater rights
and responsibilities, forest conservation and rural livelihoods tend to improve. Durst and
others (2005) provide numerous examples from Australia, Cambodia, China, Nepal, New Zealand
Vietnam, Thailand, and Vanuatu in which communities have successfully managed forest resources
to achieve a range of ecological and economic goals. White and Xu (2004) identify a global shift
toward community-based forestry models. Many of these models recognize ownership rights of
indigenous peoples and traditional communities and are devolving management responsibilities as
part of a broader decentralization process.

Latin America is emerging as a leader in implementing innovative community-based forestry

models (Molnar 2004). In Brazil the government has recognized traditional rights to 80 million
hectares of forest in the Amazon frontier. Management and forest conservation are proving as
effective as under the old government command and control systemand in many sites much more
effective. In Guatemala about 450,000 hectares of forest in the Mayan biosphere area are now under
management by communities; remote sensing clearly shows an improvement in forest cover and
forest density. In Mexico many communities have been allocated land ownership and most forest
management rights. With government and external support to build required capacities, many
community forest enterprises have developed technical expertise in forest management, production,
and marketing. In the state of Peten, for example, community forest enterprises contribute almost
$400,000 to the state treasury; they also invested $140,000 in fire control and management and
$136,000 in forest monitoring and protection. Given time, financial and technical support, and the
right incentives, many communities can effectively develop and manage forests, reducing
government management costs and generating incremental financial gains to the state.

International experience suggests that further evolution of the JFM community-based

forestry model in India may improve livelihood opportunities and conservation. But four
critical enabling conditions must be met in order for it to do so. First, communities must be
provided with more secure forest resource tenure and management rights. Second, more effective
and flexible institutional models must be applied with communities. Third, better systems for forest
regulation, monitoring, and control must be developed. Fourth, communities must be provided with
greater access to efficient markets for goods and services from the forest (Molnar, Scherr, and
Khare 2004). Addressing these four factors must occur through integrated reforms and programs.
The challenge facing Indian policymakers is to create an enabling environment that will improve
opportunities for communities to use forests as a means of moving out of poverty while not
compromising national forest conservation goals. Although international experience must be
viewed with caution, there is growing evidence that movement toward a model with greater
community rights and responsibilities over the forest can bring substantial economic and forest
conservation benefits. In India a deliberate and well-intentioned process for continuous
improvement is needed to support positive and progressive change.

Study Objectives and Structure of the Report

This study aims to stimulate debate on the continued evolution of JFM in India by presenting
research conducted within India and providing relevant examples from other regions. The report
identifies key questions and constraints surrounding the continued evolution of community forestry
in India. It suggests new models for community-based forest management based on realistic
solutions to increase forest-based livelihoods and reduce poverty in forest communities while also
strengthening forest conservation. The report outlines options for enabling policy reforms at the
state and national levels. The work builds on seminal national studies of community-based forestry
completed in the past few years, including Khare and others (2000) on forest policy related to JFM;

2
Khan and Pillai (2001) on national legal and policy frameworks; Saigal, Arora, and Rizvi (2002) on
issues and opportunities for private forestry, especially farm forests; and Bahuguna and others
(2004), which provides a comprehensive update on JFM at the state level.

The report identifies options for improving local livelihoods in a community-based forestry model
through an integrated approach that includes the legal and policy framework, institutions, resource
assessment and planning systems, and marketing systems. The study is based largely on
background papers developed from detailed analyses of JFM in Assam, Jharkhand, and Madhya
Pradesh. All three states are important, because they have high poverty levels and large numbers of
rural people who use forests for livelihoods. The three states differ in terms of the scale of the
resource base, forest cover types, forest utilization, history and scope of JFM, forestry institutional
capacities, and legal, policy and regulatory frameworks to support community-based forestry. 2 In
addition, extensive literature from other states, national studies, national statistics, and research on
community forestry in other countries was used to complement the state reviews and develop a
broad, national report.

The research focuses mainly on community-based forestry outside protected areas. Although many
states have instituted a parallel system of community-based natural resource management for
villages inside and adjacent to protected areas (based on ecotourism and limited removals of
subsistence products), the differences in approach, legal framework, and benefit-sharing warrant a
separate study. The current study focuses on issues and opportunities for community-based forestry
rather than farm forestry, which is covered in detail by Saigal, Arora, and Rizvi in their 2002 study.

The report is organized as follows. Chapter 2 provides an overview of the Indian forest resource
and forest economy. Chapter 3 reviews the legal and policy framework and identifies key issues.
Chapter 4 provides insight into the livelihood patterns of forest fringe communities and offers an
evaluation of JFM from the perspective of villagers. Chapter 5 considers the main issues
surrounding forest resource assessment and planning systems. Chapter 6 evaluates critical issues in
forest product marketing systems and the forest fiscal system. Chapter 7 presents options for policy
and program reform. Chapter 8 summarizes the reports conclusions.

2
See appendix 1 for a brief overview of the forest conditions in each state and the study methods.

3
 2. Overview of the National Forest Economy
Forest Land Base
A little more than 20 percent of Indias land base is classified as forest. India has about 64
million hectare of forest cover (FAO 2005), 3 allocated among dense (59 percent), open (40
percent), and coastal mangrove (1 percent) categories. 4

Forest ownership is concentrated in the public sector. In India, 65 percent of the forest is
administered solely by the government and another 27 percent reserved for community and
indigenous groups (through JFM) but still largely administered by government. Only eight percent
of forest land is managed
by private individuals on Table 2.1 Forest Ownership in Selected Countries
farms or by large forestry (percent)
5 Country Public Ownership Private Ownership
firms. The level of public
ownership/administration Government Community Community Individual,
in India is very high Administered Administered and Private
Indigenous
compared with many
Brazil 77 13 0 10
other developing
China 45 0 55 0
countries with significant
India 65 27 0 8
forest areas and
Mexico 5 0 80 15
community forestry Argentina 21 0 0 79
programs (table 2.1). Source: White and Martin 2002, and author

Forest stocking and productivity are generally poor. The average stocking level in India is 74
cubic meters per hectaremuch lower than the 113 cubic meters per hectare in other developing
countries (MOEF 2004). In addition, the average forest mean annual increment of 0.7 cubic meters
per hectare per year is significantly below the global average of 2.1 cubic meters. 6 Reasons for low
productivity in India include human removal of forest biomass that is not recycled into soil
nutrients, grazing pressure, fire, and over cutting (Bahuguna and others 2004). About 41 percent of
the countrys forest cover has been degraded to some degree in the past

3
FAO figures are derived from data supplied by the Ministry of Environment and Forests as part of FAOs
periodic global forest inventory reporting. The Ministry of Environment and Forests may update these figures
later, but the figures usually differ from the previous published figures in FAO reports in only minor ways. In
this report FAO figures rather than data from the Forest Survey of India are used to allow global comparisons.
4
Dense forest is defined as land having tree cover with a canopy density of at least 40 percent. Open forest is
defined as land having tree cover with a canopy density of 1040 percent. Other categories include scrub
forest, with a canopy density of less than 10 percent; mangrove forest, consisting of salt-tolerant forest
ecosystems found mainly in tropical and subtropical intertidal regions; and nonforest areas, in which there is
no tree cover of any kind (MOEF 2001b).
5
Figure was calculated by the authors, based on data from White and Martin (2002).
6
The mean annual increment is the total growth of trees in a stand up to a given age divided by that age. It is
often expressed in annual cubic meters of growth per hectare. The mean annual increment changes with
different phases in a trees life. It is highest during the middle years and slowly decreases with age. The point
at which the mean annual increment peaks is commonly used to identify the biological maturity of the stand
and its readiness for harvesting.

4
several decades (converted to open or scrub forest, for example), due to intense pressure from a
range of human and biophysical causes (box 2.1).

A regional and global analysis of forest cover provides a mixed message (table 2.2). India is the
only country in South Asia with a positive increase in forest cover between 1990 and 2000 (38,000
hectares). This increase represents only about 0.6 percent of the national forest area, however.
Forest per capita of 0.1 hectares in India is on par with other countries in the region, with the
exception of Bhutan. The change in forest cover in India is a positive feature, but the per capita
forest cover is very low.

Box 2.1 Pressures on Indias Forests

Pressure on Indias forest com from a variety of sources, including

the following:
the increase in population, from 390 million in 1950 to 1 billion in
2001
the loss of 4.5 million hectares since 1950 through agricultural
conversion and other uses
the high percentage (78 percent) of forest subject to heavy grazing
exposure of half of all forests to risk from fires
shifting cultivation, which affects almost 10 million hectares of
forest
encroachment on 1.36 million hectares of forest by 2002, with
evictions accounting for only 10 percent of affected land by 2004.

Source: India stat (2005); Bahuguna and others (2004).

Table 2.2. Forest Cover in India, other Countries in South Asia, and other Regions, 2000
Region Forest Cover Forest per Annual Change in Forest Cover
(percent) Capita Hectares 19902000
(Hectares) (000) Percent
South America 50.5 2.6 -3,711 -0.4
Europe 46.0 1.4 881 0.1
North/Central 25.7 1.1 -570 -0.1
America
Africa 21.8 0.8 -5,262 -0.8
Asia 17.8 0.2 -364 -0.1
World 29.6 0.6 -9,391 -0.2

South Asia
Bhutan 64.2 1.5 -- --
Sri Lanka 30.0 0.1 -35 -1.6
Nepal 27.3 0.2 -78 -1.8
India 21.6 0.1 38 0.1
Bangladesh 10.2 -- -- --
Pakistan 3.1 -- -39 -1.5
Afghanistan 2.1 0.1 -- --
Source: FAO (2005).

5
Contribution of Forestry to Gross Domestic Product

As a major land use, Figure 2.1 Contribution of Forestry/Logging and Agriculture to Indias
primary forestry pales GDP, 19822001
with agriculture.
Forestry and logging 35

% GDP Contribution
accounted for 1.1 percent 30
of Indias GDP in 2001, 25
while primary agriculture 20
accounted for 20.7 15
percent (figure 2.1). 7 The 10
share of Indian GDP for 5
both sectors has declined 0
slightly in current and 1982 1991 2001
constant terms since
1982. However, the Forestry and Logging Agriculture
percentage drop in Current Constant Current Constant
forestry and logging is
almost twice that for
agriculture.
Source: World Bank (2005a). World Bank data bases.
Across selected states, forestry and logging account for 0.482.97 percent of GDP in current values
(figure 2.2). The strict definition of GDP underestimates the total economic value of forests in
India, however, as many goods and services from the forest are not traded in formal markets
(examples include subsistence nontimber forest products, fuelwood, and vital ecological service
functions, such as carbon sequestration, aesthetic values, and soil stability on steep slopes).

Fuelwood trade in India is
estimated to have an
annual turnover of about
$17 billion (MOEF 2000b)
and is a source of
Figure 2.2. Contribution to GDP of logging and forestry services in
selected Indian states, 2001
3.00
GDP Share - Logging and

2.50
Forestry Services (%)

livelihood for more than

11 million people, making 2.00
it the largest employer
(formal and informal) in 1.50
the Indian energy sector. 1.00
Ecotourism and carbon
0.50
sequestration in forest
areas have been estimated 0.00
to increase national GDP
M h att issa

am
A h

nd arna la

tB d

u
ar h
Pr rh

il al
Jh htra
P a

ad
ah es
es

es an
k
a

Ta eng
ya a

er
rh ta
ss

share from forests from 1.1

C Or
ad isg

ad

M rad

N
W kh
as
K

ar

to 2.4 percent (Chopra,

a
K

Bhattacharya, and Kumar

A

2002). But even adding

these values and Source: World Bank databases.

7
Figures are from World Bank database and the Central Statistical Organization. State- level GDP data do not
disaggregate secondary forestry activity (sawmilling, pulp and paper, millwork, furniture and milling, and
other subsectors) from manufacturing. Thus GDP comparisons are restricted to logging and forestry services.

6
considering nonmarket fuelwood and nontimber forest products, the share of forestry GDP is still
far below that of agriculture.

Structure of Domestic Forest-Based Industry

Table 2.3 Secondary Forest Industry in India
Most of Indias processing Number of Capacity Share of Small -
capacity is small scale. Indias Production Scale Plants
forest-based secondary industry Subsector Units (Percentage of Production)
encompasses a wide range of Pulp and paper, 406 66a
small, medium, and large-scale paperboard
firms that process primary Wood-based panels 506 8090
timber (logs) into a variety of Sawmills 23,000 82
products for the domestic Matches 12,000 82
market (table 2.3). The vast Doors, woodworking 98 25
majority of plants and plants
production capacity is small. Source: World Bank (2005c). See appendix 2 for more details.
a. Percentage of total capacity.
Several emerging investment
constraints impede the growth of the sector. These include shortages of raw material (mainly for
logs, due to felling bans in many state forests until forest management working plans are completed
and numerous restrictions on log supply from private land and farmers); growing concern over
environmental issues (mainly in larger production facilities, such as pulp and paper mills); judical
decisions to close unlicensed mills (particularly in the North East); economic liberalization and
competition from imports (especially pulp imports); and poor management and technical skills (in
sawmills, for example, less than 3 percent of lumber meets Indian grading standards).

National Wood Supply and Demand Trends

India is facing serious imbalances between the supply of and demand for wood (figure 2.3).
Demand for timber (logs) and fuelwood is projected to increase between 1996 and 2006, while
supply is projected to remain flat, leading to significant and growing fiber supply deficits
(Bahuguna 2004; ITTO 2003). These projections suggest that by 2006, an estimated 139 million
metric tons of fuelwood will be harvested above the sustainable supply from regulated sources.
Other estimates indicate fuelwood over-cutting of 131 million cubic meters (Saigal, Arora, and
Rizvi 2002). Perhaps half of this gap is made up by subsistence collection of deadfall and
nondestructive wood sources from natural forests (collecting branches and litter) in rural areas. The
balance of the deficit is met through unregulated removal of fuelwood from natural and plantation
forests and regeneration on degraded lands or wastelands, with subsequent impacts on forest
productivity and sustainability. 8 Driving the fuelwood deficit is the relative high cost of liquid
propane gas for lower income households in rural areas and the lack of distributional networks
(UNDP/World Bank 2003). Supplies of timber from natural forests have been limited by the 1988

8
These estimates must be viewed with caution (see Pandey 2001). Much of the supply is not market based
and is used for subsistence. Supplies often consist of twigs and forest litter (nondestructive) rather than larger
logs (destructive), especially where natural forests are located far from the village and people gather material
from wastelands. Most studies do not examine the provenance or form of fuelwood. Moreover, prices (either
at collection time or through market prices for commercial fuelwood) are not usually factored into demand
estimates. There is an urgent need for a detailed analysis of fuelwood supply and demand at the national level
and an assessment of the impact on growing stock. In the interim, most analysts agree that fuelwood
consumption is largely uncontrolled and represents a major drain on the forest.

7
National Forest Policy, which discourages harvesting of natural stands, and the 1996 Supreme
Court decision requiring an approved working plan before commercially harvesting green timber in
any state forest division.

Figure 2.3 Projected Supply of and Demand for Fuelwood and Timber in India, 19962006

Fuelwood Supply and Demand Timber Supply and Demand

250 100

200 80
Million tonnes

million m3
150 Supply 60 Supply

100 40

50 20

0 0
1996 2001 2006 1996 2001 2006

Rural Urban Industry Household Industry

Source: (Bahuguna 2004; ITTO 2003; Mahapatra 2003, MOEF 2000)

While supplies are likely to increase in the future as management plans continue to be approved and
new plantations come on stream, they will not meet rising domestic demand. The projected timber
supply deficit for 2006 is 39 million cubic meters. This shortfall will be met partially through
imports of logs from overseas suppliers, particularly, Indonesia, Malaysia, Myanmar and Nigeria.
Log imports are supported through a favorable tariff regime of 5 percent on logs, compared with 25
percent on sawn wood. On a volume basis, about 95 percent of all wood imports to India are
industrial roundwood, mainly tropical hardwoods. On a value basis, roundwood accounts for about
42 percent of total forest products imports (ANU 2003), but roundwood imports were only 2.1
million cubic meters in 200001. For products like pulp and paper, alternative supply options, such
as bamboo or importing pulp and paper directly, exist. But for timber the current level of log
imports does not come close to meeting the supply gap. While available data preclude a detailed
analysis of the national timber market, the inevitable conclusion is that much of the log supply
deficit is being met through illegal harvesting, putting additional pressure on remaining high-quality
dense forests. The supply-demand situation underscores the national governments strong support
for forest conservation, manifested through efforts to protect existing forests and grow new
plantations under JFM.

Primary Institutions for Community-Based Forestry in India

The Ministry of Environment and Forests is the dominant national forestry agency. It is the
lead agency for forestry, wildlife management, conservation, environmental management, and
international conservation programs. Forestry is a major unit in the ministry, with direct
responsibility and supporting structures for national-level forest management, conservation, and
wildlife programs. Forest management is delivered through five business units, responsible for
forest cover mapping, policy, protection, regional forest programs, and research and training.
Training is supported by four national training centers. Research is coordinated by the Indian
Council of Forestry Research and Education (ICFRE), which oversees 10 national research centers.

8
National wildlife management is delivered through four business units that handle national parks,
other protected areas, and species management Conservation houses the National Afforestation and
EcoDevelopment Board, which delivers central financing to states and communities (through JFM)
for forest rehabilitation and plantation establishment.

Forest departments are the lead public agencies at the state level. The organizational structure
focuses on traditional forest management functions and the emerging community forest program.
The forest department organizational structure is similar across most states, with a Principal Chief
Conservator of Forests at the apex reporting to a Principal Secretary and managing main business
units headed by an Additional Principal Chief Conservator of Forests. District Forest Officers
(FDO) are the senior professionals operating at the subdistrict level. Business units tend to focus on
planning and inventory, forest rehabilitation, forest production and marketing, protection and
enforcement, wildlife management, and social/community forestry. For marketing of high-value
nationally listed species such as teak, many states (including Jharkhand and Madhya Pradesh) have
a separate government marketing corporation, usually acting as a legal monopoly.

Forest Development Agencies (FDAs) are responsible for several centrally funded forestry
initiatives. FDAs operate in each state at the forest division level. They are designed to improve
linkages between rural development, rural employment generation, and forest conservation. The
executive body of the FDA is chaired by the Conservator of Forests, with the DFO as Member
Secretary. Experts from other line agencies are represented but have no voting rights. JFM
committees are represented through 15 nominees from the general body, seven of whom must be
women. On average one FDA represents 2550 JFM committees for the centrally funded forestry
conservation schemes. The fund flow is through JFM committees, with villagers hired mainly to
plant trees.

The capacity of community support organizations to assist with JFM varies across states.
Several community support organizations operate development programs in each state, usually for
agriculture and development in health, education, forest management and forest villages. Some
community support organizations are affiliated with larger national organizations, others are local
in origin. Constrained forest department resources generally precludes a more prominent role for
community support organizations in JFM.

The private sector plays a small role in community-based forestry. In most states the private
sector actors may act as marketing agents for government marketing corporations, purchasing
commercial nontimber forest products from communities. There is very little space for private
forest consultants to work directly with communities to assist with management planning or
marketing. Private farm forestry has strong potential to help address domestic wood supply
requirements, but restrictions on harvesting and transport for certain commercial timber species
are strong disincentives to grow forests. Partnerships between communities and larger processing
firms are limited by government policy, which bars private companies from accessing government-
owned forest lands. Companies cannot easily work with larger farmers to establish plantations
because of legislation restricting the area of land that individual farmers can acquire. Instead, firms
need to work with larger numbers of small farmers to develop their wood supplies, which could
increase their costs.

9
Public Expenditures on Forestry
Real expenditures by the central government are rising to meet timber supply challenges. At
the national level, the Ministry of Environment and Forests allocates central plan financial
resources to forestry programs, through both individual states and independent national activities,
such as R&D. 9 These funds make up the majority of public resources allocated for capital
investment and recurrent costs in forest management in India. In nominal terms, central plan
expenditures by the Ministry of Environment and Forests were about Rs990 Crore in 2002
03 (or $220 million), representing roughly 4 percent of national GDP. In real terms these
expenditures increased from
just under Rs300 Crore in Figure 2.4 Plan Expenditures by the Ministry of Environment
199293 to Rs543 Crore in and Forests on Forest Management, 1992/932002/03
200203, representing
aggregate real growth of 81 300
Real Rupees (10 million)
percent, or average annual 250
growth of 8.1 percent over
the 10-year period. Within 200
this aggregate envelope, 150
expenditures on forest
100
management through
Forests and Wildlife 50
and, National Afforestation 0
and the Eco-Development
Board increased from 93 94 95 96 9 7 9 8 9 9 00 01 02 03
9 2- 93- 94- 95- 96- 97- 98- 99- 00- 01- 02-
Rs192 Crore to Rs247 19 19 19 19 19 19 19 19 20 20 20
Crore between 199293 and Forests & Wildlife
200203, or about 29 National Afforestation, Eco-Development
Total
percent over the 10-year
period (figure 2.4). Source: National Planning Commission (various years)

A breakdown of the forestry and wildlife outlays shows that the budget is allocated among five
major program areas, with the majority of funds directed to R&D, education, and training (figure
2.5) 10 . R&D education and training supports the Indian Council of Forest Research and Education
and several national forest research institutes, including those working on genetics, plywood,
coastal and marine management, wildlife and forestry. It also supports environmental and natural
resource training programs, and curricula development, and the training programs for Indian Forest
Service.

9
For additional material, refer to appendix 3.
10
Note: Forest survey: Supports national forest cover surveys by Forest Survey of India in Derhadun
Forest policy: Policy development and forest sector information
Forest protection: Programs to reduce losses from fire, insects, and disease.
Strengthening of forest division supports forest agency infrastructure.

10
A relatively small share of the
Figure 2.5 Breakdown of Spending on Forestry and Wildlife
budget is allocated to forest surveys
by the Ministry of Environment and Forests 2002-03
and policy, which are critical to
support community forest
Strengthen
management programs. In addition Forest Forest
to central plan financial support, Protection Division
states also allocate budget support to Forest Policy 9% 5%
local forest departments. 4%

The Ministry of Environment

and Forests, through its Central plan
Forest Survey
allocations, provides the
4% R&D
bulk of public finance for capital
Education,
investment in forest management Training
for plantations (through community 78%
programs), recurrent forest research,
protection, monitoring, and
inventory. While real expenditures
are rising, questions remain about
Source: MOEF (various years).
how well spending is supporting the
evolution of JFM at the state level.

Real state budgets are rising Figure 2.6 Real State Forestry Expenditures in Assam and
slowly, but they mainly cover Madhya Pradesh, 19952002
recurrent costs. In Madhya
Pradesh real forest department 5,000

expenditures from state allocations 4,000

Million Rs

increased from Rs2.8 billion ($61 3,000

million) in 1992 to Rs3.0 billion
2,000
($66 million) in 2002 (figure 2.6).
11 1,000
But much of the rising trend to
1999 was due to budget support 0
from the World Bank JFM project 1995 1996 1997 1998 1999 2000 2001 2002
in the state. After completion of the
project, real expenditures were not Madhya Pradesh Assam
much higher than they were in
1995. About 75 percent of these Source: World Bank (2005b); TERI (2005)
nonplan expenditures are for recurrent costs of field operations (territorial and production) and
commercial harvesting. Research and training account for less than 2 percent of total recurrent
expenditures funded by the state. In Assam real state budget allocations for forestry peaked in 1999
and declined thereafter; they have slowly increased to 1999 levels. Most nonplan expenditures are
for recurrent costs and mainly cover salaries. In Jharkhand the allocation of annual state budget to
forestry in undivided Bihar forest departments was less than 0.7 percent prior to 2000; this figure
was 3 percent in 2002-03. 12 Nonplan operating budgets are about Rs.1 billion ($22 million), with
70 percent spent on forest management. A worrisome feature, common to the other two states, is
the relatively small budget allocations to critical supporting forest management functions, such as
inventory, planning, and research.

11
Detailed budget data are available from the forest department.
12
Detailed budget figures are available only for 200203.

11
 Extent of Joint Forest Management in India
JFM continues to expand as a community-based forestry model. It now covers 27 states, 85,000
village JFM committees, and 17.3 million hectares of forest land. Four states (Andhra Pradesh,
Chhattisgarh, Madhya Pradesh, and Maharashtra) account for two-thirds of all forest cover under
JFM and 39 percent of all JFM committees (table 2.4). Nationally, the average area of forest per
committee is 217 hectares. Villages included in JFM programs encompass 8.4 million families.
Assuming an average family size of four people per household, this represents almost 34 million
people. Tribal families account for one-third of all families in JFM programs.

Table 2.4. National JFM Characteristics

State JFM Forest area Share of Forest area Population characteristics (families) Average Tribal
committees under JFM JFM area per committee Scheduled Scheduled Other Population familes per familes per
(no) (ha) (%) (ha) Caste Tribes Groups Under JFM JFM area JFM area
Madhya Pradesh 13,698 5,500,000 32 402 291,000 709,000 641,000 1,641,000 120 52
Chattisgarh 6,881 2,846,762 16 414 251,012 760,892 348,347 1,360,251 198 111
Andhra Pradesh 7,245 1,886,764 11 260 136,789 188,621 285,685 611,095 84 26
Maharashtra 5,322 1,411,215 8 265 107,409 308,934 505,291 921,634 173 58
Uttaranchal 10,107 859,028 5 85 87,500 15,000 397,480 499,980 49 1
Jharkhand 3,358 847,967 5 253 53,617 76,615 165,903 296,135 88 23
Orissa 15,985 821,504 5 51 0 na na na na na
West Bengal 3,892 604,334 3 155 113,304 115,836 236,255 465,395 120 30
Tamil Nadu 1,816 445,965 3 246 72,290 11,484 187,160 270,934 149 6
Rajasthan 3,667 376,766 2 103 33,229 152,017 115,049 300,295 82 41
Himachel Pradesh 835 290,922 2 348 62,915 7,024 189,130 259,069 310 8
Bihar 493 267,240 2 542 53,377 31,618 157,644 242,639 492 64
Karnataka 3,470 232,734 1 67 50,465 37,303 155,589 243,357 70 11
Kerala 323 170,712 1 529 3,828 11,371 25,425 40,624 126 35
Gujarat 1,424 160,525 1 113 5,748 123,347 20,096 149,191 105 87
Uttar Pradesh 2,030 112,652 1 55 196,793 7,240 416,152 620,185 306 4
Manipur 205 93,941 1 458 57 13,883 5,511 19,451 95 68
Arunchal Pradesh 308 80,217 0 260 0 20,474 0 20,474 66 66
Assam 503 79,251 0 158 4,145 31,583 21,613 57,341 114 63
Punjab 287 56,243 0 196 20,029 9 17,984 38,022 132 0
Harayana 875 56,000 0 64 31,000 0 134,500 165,500 189 0
Jammu and Kashmir 935 49,544 0 53 4,789 5,324 38,347 48,460 52 6
Tripura 234 34,154 0 146 2,896 11,291 6,052 20,239 86 48
Nagaland 306 22,930 0 75 0 57,492 0 57,492 188 188
Goa 26 13,000 0 500 36 0 300 336 13 0
Mizoram 249 10,980 0 44 1 32,240 0 32,241 129 129
Sikkim 158 600 0 4 669 835 1,764 3,268 21 5
Total 84,632 17,331,950 na na 1,582,898 2,729,433 4,072,277 8,384,608 na na
Source: Bahuguna (2004).

These numbers represent a remarkable success by many measures. But this progress should be
viewed with caution. Using Maharashtra as an example, 10,420 JFM committees cover 65 percent
of the villages in and around state forests. But only 1,613 villages are actively operating under new
FDAs (Dharia 2005). The remainder may have JFM committees that are not fully operational or
engaged with the forest department.

12
 Global Forest Transitions and Community-Based Forestry
The international forest sector is undergoing several transitionstransitions that create
opportunities for communities in India. Global demand for forest products is growing, especially in
developing countries. Delivered wood costs for small diameter spruce and pine logs in North
America, Western Europe, and Eastern Europe are now significantly higher than in South America,
South Africa, and New Zealand. The timber industry is becoming more concentrated, with 50
companies processing 41 percent of the worlds industrial roundwood. Demand for secondary
processed wood products is growing (Molnar 2004). These transitions are creating opportunities for
small-scale producers in communities and private farms who can produce various forest products at
competitive costs (box 2.2).

Box 2.2 Opportunities for Small-Scale Producers Created by Global Forest Transitions

Changes in the global forest sector are creating a variety of opportunities for small-scale producers in India. These
changes include the following:

Increased control of forests: As a result of recent government recognition of local claims and devolution, nearly one-
fourth of the forest estate in the most forested developing countries is now owned (14 percent) or officially administered (8
percent) by indigenous and rural communities. Local ownership offers opportunities to capitalize on forest assets.
Growing product demand: Although demand for forest products in developed countries is growing slowly, demand in
developing countries is growing rapidlyand this demand will have to be met mainly by domestic production. New
processing technologies are creating demand for small-diameter, lower quality wood, which communities can and do
produce.
Rising value of natural forests: The supply of tropical hardwoods from natural forests has declined greatly, due to
deforestation, overharvesting, establishment of protected areas, and civil disturbance. As a result, stands of natural tropical
hardwoods are becoming more valuable. Local people hold a substantial and increasing share of these stands.
Demand for environmental services: Environmental concerns are creating new markets for certified forest products and
ecosystem services. Socially and environmentally aware investors are exploring opportunities to invest in sustainable
forest management, including local farm and community producers.
Forest intensification: Demand has prompted intensified forest management. Forest scarcity, increased prices of timber
relative to those for grain, expansion of farming into marginal lands, tree domestication, and outgrower arrangements have
stimulated extensive tree growing and commercialization on small farms.
Globalizing markets: While globalization often favors highly efficient, lower cost producers, it is also opening
opportunities to nontraditional suppliers, as new niche markets are created and buyers become more proactive in seeking
and securing reliable sources of scarce forest commodities.
More democratic governance: Investor and consumer demands for socially responsible forestry are beginning to drive
improved social protections for forest communities. Democratization is fostering reforms in forest governance that give
greater voice to local people. International norms increasingly support indigenous land rights.

Sources: Wunder (2001); Neumann and Hirsch (2000); White and Martin (2002).

Rising domestic demand for timber products and supply deficits from existing natural and
plantation forests represent growing opportunities for communities in India. For tropical hardwoods
like teak, diminishing global supplies and rising scarcity values should open up opportunities for
these products from small-scale producers. Export markets are also expanding for certain kinds of
forest products, especially in China, where imports of timber products are 20 times those of India
and growing rapidly (White and Xu 2004). Global markets are widening for specialized niche
products, such as high-value nontimber forest products. Opportunities appear to exist for forest
communities in India to take advantage of these market prospects. For them to do so, however, JFM
programs will need to recognize national and international market transitions. To benefit from these
transitions, JFM will also need to continue evolving, supported by appropriate policy and program
reforms, discussed in the remaining chapters of the report.

13
 3. Evolving Legal and Policy Environment

National Legal and Policy Framework

Under the Indian Constitution, national and state governments share jurisdiction for
forestry. 13 The center generally sets the broad national policy and legal framework and supporting
statutes. Three major national laws governing forestry have been promulgated over the past 127
years: the Indian Forest Act of 1878, the Indian Forest Act of 1927, and the Forest Conservation
Act of 1980. 14 Three key forest policy pronouncements have been made in independent India: the
Forest Policy of 1952, the National Commission on Agriculture of 1976, and the 1988 Forest
Policy. 15 Another law, the Indian Wildlife (Protection) Act 1972, is also important, since there is
interaction and various contradictions between this act and the more traditional forestry acts for
communities located in and adjacent to protected areas. A proposed Scheduled Tribes Bill (2005)
would recognize historic land rights held by tribal people in scheduled areas to an upper limit of 2.5
hectares per family.

The evolution of the legal and policy framework in India shows a strong initial focus on industrial
forestry, a gradual shift to social forestry three decades ago, and a major swing toward conservation
and adoption of JFM about 15 years ago. The National Forest Policy of 1988 embodies most
elements of sustainable forest management. It concentrates on conservation and strengthening of
the role of communities in forestry stewardship, representing a major shift in forest management
intentions. The Ministry of Environment and Forests issued a policy circular in June 1990
encouraging state forest departments to involve communities directly in forest management. The
1988 policy has been criticized in some circles for promoting forest conservation, perhaps at some
expense to commercial forest use, for not offering practical options for policy implementation, and
for sustaining the all-encompassing role of forest departments, including the contradictory functions
of being the forest authority and operating as a public enterprise in commercial forest production.

Many of the salient paragraphs governing community-based forestry in national policy have not
been reinforced by a new national legislative framework. There are apparent conflicts (in a strict
legal sense) between some of the progressive intents of the 1988 policy and the Forest Conservation
Act of 1980. In addition, various legal amendments, policy circulars, and guidelines issued by the
Ministry of Environment and Forests over the past two decades, while helping support the evolution
of JFM at the state level, have added excess complexity and overlaps in the legal framework when
interpreted by states. Although many of these minor legal amendments resulted from pressure to
follow innovative state practices, there is still a significant gulf between national policy intent and
field implementation at the state level.

Legal and Policy Framework in Assam, Jharkhand, and Madhya Pradesh

State forest laws and regulations help implement the national legal framework. All three of the
states examined (Assam, Jharkland, and Madhya Pradesh) apply a suite of state-level laws to
govern forests and forest management. A common feature in Jharkhand and Madhya Pradesh is the

13
See appendix 4 for additional material on legal and policy frameworks.
14
The first Act on Forestry was enacted in 1865.
15
Although the National Commission on Agriculture is not strictly a policy document, its recommendations
are considered important in policy discourse on forest management.

14
strong influence played by the umbrella Indian Forest Act of 1927 and to a lesser degree the 1980
Forest Conservation Act. Madhya Pradesh formally adopted the Indian Forest Act of 1927 and like
other states has followed up with other state-level acts, rules, and regulations to provide for more
local flexibility. Assam operates under a unique legal framework, because the Assam Forest
Regulation Act of 1891, rather than the Indian Forest Act of 1927, is the umbrella operative law. In
many ways however, the legal direction of the Assam Forest Regulation Act of 1891 corresponds to
the Indian Forest Act of 1927. Various orders passed by state governments since 1927 have
contributed to a more restrictive legal framework, although it is largely the interpretation and
implementation of these orders by forest officers that directly affect community rights and
responsibilities. The main issues include outdated and narrow forest policies, the uncertain legal
status of JFM and registration processes, inadequate recognition of historic forest rights in current
policy and law, inefficient tenure systems for communities under JFM, and conflicts with national
legislation governing decentralization, especially in scheduled areas.

State forest policies are evolving, but they need further strengthening and legal support. Forest
policy should guide development of the forest sector and provide a clear indication of the states
goals for community forestry. All three states have an existing policy (as a separate document or
through smaller circulars) or have recently drafted a new policy. States have also drafted forward-
looking vision papers. While many of the articles in these new forest policies and vision
statements represent a positive step forward, they are still based on the existing legal framework.
Some policy goals still reflect the existing JFM model, with little recognition of how further
reforms could empower communities. The policies of Jharkhand and Madhya Pradesh were not
prepared with broad public input; as a result, they tend to be narrower in focus toward conservation
and rural livelihood goals. They are also weak in terms of economic analysis and market
information. Assams 2004 policy is more progressive and was developed by a multistakeholder
body with broad representation from the forest department, community support organizations, and
technical experts. The Assam policy also pays attention to the trade- and market-related aspects of
forestry to motivate private sector partnerships. Policy documents from all three states suffer from
minor conflicts and contradictions with existing legislation, both at the national and state levels. Yet
even if policies are strengthened, without legal reforms and additional financial resources they will
be very difficult to implement.

Forest settlement has eroded historic land and forest tenure rights. Settlement of reserve
forests is a controversial issue, because of the wide powers granted to forest departments and the
historical conflict it created over traditional land rights. Following the 1878 Forest Act, large-scale
designation of reserve forests took place through the settlement process in many states. Informal
systems of land rights and forest use privileges that had existed between rural communities and the
government for centuries were often rescinded. State appropriation of forest land often involved the
dispossession of adivasi communities ancestral land. As an example, in the Singhbum District of
Bihar (now in Jharkhand), many years ago the state dispossessed the Ho tribe from their villages
and surrounds in an attempt to demarcate a large reserve forest.

At the national scale, many of the forests declared as reserved areas were uninhabited; where
traditional rights existed, they were often recognized and respectedin principle, if not in practice
(N.C. Saxena, personal communication 2005). It was mainly after Independence that the most rapid
acquisition of forests by government occurred. This constituted a critical turning point, politically,
socially, and ecologically (Gadgil and Guha 1995; Liedtke 2003). Legally, channels to contest the
reservation of forests existed, but rural people had little experience with legal procedures, and
illiterate villagers were often unaware that a survey and demarcation was in process (Poffenberger
and McGean 1998).

15
The settlement process and expropriation of forests is a significant factor contributing to the deep
resentments among many forest-dwellers towards government (and the Forest Department in
particular) in states such as Jharkhand and Madhya Pradesh where tribals comprise a large portion
of the rural population. At the time, settlement of reserve forests shifted forest management
authority and responsibility from people to government, and created a highly inequitable power
balance. The state also retained significant power over protected and private forests.

The JFM process needs to acknowledge historic forest resource rights. Each state appears to
have unique and specific historic rights associated with forest dwellers that existed before
enactment of forest legislation both at the national and state levels (table 3.1). In Jharkhand, for
example, a rich array of historic rights exists. Where JFM has been introduced into these areas, a
legal case could be made in favor of the traditional system of land and resource rights. Assam is
slightly different, in that councils governing the autonomous district areas maintain the authority to
manage forests outside of reserve forests. But as in other states, most historic forest resource rights
have been subsumed over time by various laws, rules, and regulations. Although states were
encouraged to acknowledge historic rights in a 2000 circular from the Ministry of Environment and
Forests, implementation has been slow. Generally, tenure is a question that appears to be quite
vague in umbrella JFM resolutions and specific agreements signed with communities. The notion of
clear, secure, and exclusive rights assigned to communities for a defined area of forest (box 3.1) is
not present in the JFM agreements examined. The JFM regulatory framework in each of the three
states does not bestow efficient resource rights to communities.

Table 3.1. Historic Forest Tenure Rights in Assam, Jharkhand, and Madhya Pradesh
State Right Description
Assam Autonomous districts Excluded area rights in three districts recognized under 1891Assam Forest
Regulations, gave local authorities specific powers over allocation and use of
forests outside reserved forests.

Khaira, Uriam, Patadar Gave concessions to tribal people to fell trees in selected areas; many
tree felling concessions have since been revoked.

Mikir Hills District Empowered executive committee of the district council to convert any land,
Forest Act 1959 to the disposal of the district council, into a village forest that will be for
the collective benefit of the village community.
Jharkhand Khunkatti rights Granted villagers rights to forest produce in village periphery, acknowledged
in Chota Nagpur area and Chotanagpur Tenancy Act 1908.
Landlord-resident Landlords exercised rights to manage forest and sell produce, subject to rights
of residents to take wood for their own purposes.
Khatian Part II Recorded rights of resident cultivators and tenants where landlords
established exclusive rights.
Concept of Halthorpe Trees grown in a cultivators land belong to the cultivator.
Gairmazarua Am lands Unsettled land is where community traditionally has access rights.

Santhal Paragnas lands
Madhya Nistar forest rights
Pradesh
Source: Background studies
Granted village headman right to clear and settle selected arable and
nonarable wastelands.
Granted villagers customary right to graze their cattle in the wasteland of the
village and to take other forest produce, such as fuel, wood, timber, thorns,
and grass, for their domestic use.

16
 Box 3.1. Crafting effective forest resource rights
What makes for efficient forest rights for communities? Global experience suggests the following
characteristics:
Forest resource rights are clearly defined.
The duration of the rights is spelled out.
The rights cannot be unilaterally taken away.
There is certainty over boundaries.
The government agency entering into the rights agreement with the community must have the legal
authority to do so.
Rights have legal standing.
There are accessible and fair avenues for seeking legal recourse in disputes.
Source: Molnar, A., Scherr, S., and A. Khare 2004; and background studies

JFM has an uncertain legal basis in some states. The concept of JFM is a central feature of the
1988 National Forest Policy. It has been endorsed and initiated by all state and union territories.
However, there have been no accompanying changes in the national legal framework for JFM.
Instead, JFM is normally operational through administrative orders (government orders) that have
little legal underpinning; this is certainly the situation in Jharkhand and Madhya Pradesh. In the
event of conflict with the Indian Forest Act of 1927 or the Forest Conservation Act of 1980, the
national JFM circular and state-level government orders may be overridden by these national laws.
The fact that these government orders are easy to modify lends flexibility, but it deprives these
orders of certainty and legally security. Some states such as Assam, Uttaranchal and Uttar Pradesh
have linked JFM policy to state legislation. This is a progressive step but it is not followed by most
states.

Another issue is the binding instrument concluded between the forest department and the
community participating in the JFM program, the Memorandum of Understanding. While the
Memorandum of Understanding sets out use rights for communities, it is not a legal and binding
contract, and it is heavily weighted in favor of the state. Furthermore, the time period covered is
often either too ambiguous (for all time) or too short (five years) to provide a meaningful and
clear incentive for community investments and support. In addition, under current JFM resolutions
in each of the three states, the DFO is usually the competent authority responsible for registering
the committee with the forest department. Ministry of Environment and Forests guidelines in 2000
suggest registering JFM committees as societies under the Societies Registration Act of 1860.
Registration is a legal process. Although registering committees under this act is a positive step, it
is unclear if the DFO, who signs on behalf of the government, has the proper legal authority to do
so. Registration by a person without the legal authority to do so may be legally invalid.

Forest boundaries are often unclear. Confusion over forest boundaries is a recurring problem for
JFM committees. Most committees want their forest tract boundaries to be formally demarcated,
which corresponds to one of the criteria for efficient resource rights. Informal agreements between
villages over forest boundaries may work when the resource is degraded, but once valuable
products are regenerated, conflicts can emerge in the absence of formal notification. Boundary
disputes between neighboring committees are likely to increase as harvesting approaches. Up-to-
date forest maps at an appropriate scale are usually not available, which limits any formal
agreement of boundaries. A complicating factor is that natural, administrative, and customary
boundaries rarely coincide. In practice, under existing customary use, different boundaries apply to
different products (grazing and fuelwood, for example).

Different rules exist for different forest-based committees. In Assam and Jharkhand, two
categories of forest-based committees have been established. Eco-Development committees handle

17
areas within five kilometers of wildlife sanctuaries and national parks (components of protected
areas) and reserved forests. A JFM committee is responsible for other forest areas (primarily
protected forests and other recorded forests, depending on the state). Madhya Pradesh has created
two committee types in addition to Eco-Development committees. Village forest committees are
created within five kilometers of degraded forests and where afforestation programs are targeted;
forest protection committees are created within five kilometers of good-quality high forests where
protection and commercial timber production is the main goal. Eco-Development and JFM
Committees have different benefit-sharing schemes. This can cause confusion where protected
forests (targeted for JFM Committees) lay within five kilometers of a protected area (where an Eco-
Development Committee would normally be established).

The different categorizations among protected areas are legally untenable, because protected forests
within wildlife sanctuaries and national parks are elevated to a higher legal category. The legal
arrangement governing protected forests within five kilometers of rights holders in reserve forests
are not clear. In all cases, the rights, responsibilities, and benefit sharing schemes are slightly
different.

Government rules and restrictions hinder more direct marketing of forest products by
communities and farmers. Certain forest commodities were nationalized in some states in the
1960s and 1970s under national forest legislation, by which listed species can be marketed only to
state forestry marketing corporations. One rationale for the policy change was the need to protect
the poor against exploitation by private traders and middlemen. Since the state could generate
revenues by exercising this monopoly right, the requirement for state marketing was steadily
extended beyond key timber species to include several nontimber forest products, such as kendu.

Transit regulations are also applied to listed species, such as sal and teak. These regulations are a
primary cause of conflict that has reached the courts and that hinders communities and private
farmers from improving forest livelihoods through the production and direct sale of listed forest
products from their own land. Transit
regulations are specified by state Box 3.2. Impact of Transit Rules in Jharkhand
legislation but are strongly guided by the
Indian Forest Act of 1927. In general, the The marketing of sal logs from private farms is
constrained by legal and regulatory requirements.
export, import, or moving of timber and
Farmers must first offer the timber to the forest
forest produce is prohibited without a pass department, which harvests and sells the wood at
from an authorized officer of the forest scheduled prices less a 15 percent marketing
department. The basis for the law is that commission. Alternatively, the forest department can
unrestricted movement of forest products provide clearance for the landowner to do the harvesting
could lead to illegal harvesting and and marketing himself. In either case the farmer must
transport of timber and nontimber forest first prove ownership of the land in order to be issued
products. These rules, however, are wide harvesting or transit permits. This process can take
ranging in nature and inconsistently several weeks and provides a fertile ground for rent-
applied in different states. This has given seeking behavior and middlemen who provide permit
avoidance services. A number of sawmill owners
rise to an overregulated framework and
indicated that without the services of middlemen in the
often contradictory provisions in different process, it was difficult for private farmers to market
states, which impede smooth interstate their timber.
transit of many forest products. The Source: Background studies - Jharkhand
transactions costs on the permit seeker are
high (box 3.2).

All three states examined have a long history of transit rules. Earlier laws in Madhya Pradesh listed
13 timber species. In Jharkhand the Bihar Forest Produce (Regulation of Trade) Act of 1984 and the

18
Bihar Timber and Other Forest Products (Control of Transit Rules) of 1973 listed eight timber
species. In Assam similar laws pertain to important species, such as teak and sal. States have a
legislated marketing monopoly over main commercial nontimber forest products, such as kendu
leaves. The situation is slowly changing states such as Madhya Pradesh are gradually easing transit
requirements on various nontimber forest products. Assam has eased the restrictions placed on
bamboo by legally defining it and five other species (mostly fruit-bearing trees) as tree species.
These are positive developments, which are to be encouraged and supported, but the overall
harvesting and marketing system is still quite restrictive for communities and farmers.

Legal enforcement is weak. Forestry legislation is enforced mainly by state forest departments.
Poor field capacities and weak monitoring systems are constraints in each of the three states
examined. Through JFM, communities provide limited forest protection (against small-scale illegal
cutting by outsiders, for example), but they lack the legal power to make arrests. Instead, forest
department officials, who have this authority, must be summoned. For more serious offenses, such
as major illegal encroachment or large-scale illegal harvesting on reserved forests, armed forest
officers have been called in to respond with appropriate force.

State forest departments lack legal expertise. The web of forest-related legislation across
different state agencies that can affect community-based forestry is complex and very difficult even
for professionals without legal training to fully grasp. In general, forest department officials have a
poor understanding of the legal and regulatory framework surrounding forestry and communities,
including linkages with traditional forest rights and laws governing decentralization. Fear of acting
outside an uncertain legal framework can limit testing of creative approaches for JFM by
progressive forest officers. Knowledge of the penal code and other sectoral legislation is weak,
which causes uncertainty over the extent of powers of arrest by forest officers.

The Panchayat Extension to Scheduled Areas Act of 1996: Panacea for

Community Forestry?
The 73rd Constitutional Amendment, passed in 1992, specifies three levels of local
institutions: the village level, the block level, and the district level. The amendment supports the
governments goal for decentralization of governance and gives panchayat raj institutions a
statutory mandate and the potential to raise local finances through taxation.

Under the Panchayat Extension to Scheduled Areas Act (PESA) of 1996, gram sabha (village
assemblies) in scheduled areas were endowed with powers over community resources
generally and more specifically with ownership of minor forest produce. The Panchayat Raj
Act is based on the Indian Constitution and as such has a stronger legal footing than JFM circulars,
government orders, or even legislation that may be in conflict with the act. Where forests within the
panchayat area are on revenue land, they fall under the purview of the panchayat. However, if the
communities are growing notified timber or nontimber forest products, the forests are subject to
state and national laws governing harvesting and transit. If the forest around the community is
designated as a reserved or protected forest, the panchayat laws can conflict with forestry
legislation.

Each of the three states examined approach the PESA differently. The Assam Panchayat Act 1994
extends to all rural areas except the autonomous districts under the sixth schedule of the
constitution (the North Cachar Hills and Karbi Anglong Districts and the Bodoland Territorial
Autonomous District). PESA is applicable only to fifth schedule and not sixth schedule areas,
which encompasses the autonomous districts of Assam. The JFM resolution does not distinguish

19
between autonomous districts and other districts. This is bound to create conflict with the district
council in the scheduled districts. In Jharkhand panchayat elections have yet to take place. In
Madhya Pradesh gram panchayats are empowered to issue passes for the transit of forest produce,
within or outside Madhya Pradesh. While the gram panchayat was made responsible for the
plantation and preservation of panchayat forests, it was subject to the availability of funds within
the gram panchayat, which in practice have been limited. 16 Under the Madhya Pradesh Act 5 of
1999, the gram sabha (the gathering of all villagers within the jurisdiction of a gram
panchayat) was entrusted with the management of natural resources, including water, land, and
forests. In case of a conflict, the specific laws dealing with the natural resource take precedence.

16
Act 3 of 2001 was renamed the MP Panchayati Raj Act as Madhya Pradesh (Panchayat Raj Avam Gram
Swaraj) Adhiniyam, 1993.

20
 4. Forests as a Source of Livelihood:
Perspectives of Forest Dwellers
Forests have the potential to improve the livelihoods of forest dwelling people, particularly
tribal people, who are among the most disadvantaged groups in Indian society. For JFM to
better address the livelihood needs of forest dwellers and contribute to broader rural development, it
is important for implementing agencies to understand community and tribal institutions and
capacities, livelihood patterns, interactions between JFM institutions and local institutions, and
whether or not current systems for rural development address the needs of these communities. 17
Field surveys and literature reviews from the three states studied provide a useful perspective from
forest dwelling people and raise a number of issues that need attention. Given the high proportion
of tribal people living in forest-based communities and their role in JFM, much of the focus of this
chapter is on tribal people as forest dwellers.

Characteristics of Forest Dwellers in Assam, Jharkhand, and Madhya

Pradesh
Assam, Jharkhand, and Madhya Pradesh are poor, and their Human Development Indices are well
below the national average. Small average landholdings, the low productivity of agriculture, and
limited opportunities to earn nonfarm income from other resources, such as forests leads to
migration as an important coping strategy for people in many rural areas.

About 742 million people, or 72.2 percent of Indias population, live in rural areas. Of these, 89
million belong to scheduled tribes. The scheduled tribes are concentrated in the so-called Tribal
Belt of central India, with a second concentration in the Northeast. The Tribal Belt represents a
distinct geocultural region and is home to the main tribal groups in India (the Gonds, the Santhals,
the Oraons, the Mundas, and the Khonds) as well as hundreds of subtribes, each with its own
dialects, customs, and traditions. Tribal people generally dwell in forested and hilly areas. They
depend on forests for their cultural, spiritual, and to varying degrees, economic needs.

The tribal communities in Assam, Jharkhand, and Madhya Pradesh are among the poorest groups in
India. The higher incidence of poverty in tribal regions is related to tribal peoples low bargaining
capacity, their lack of proportional political representation, the poor quality of local governance,
and their constrained access to forests, land, and water (Shah and Sah 2004). Regardless of wealth
and social position, tribal people are not fully integrated into the community unless they own land
in the area; only land ownership and farming seem to give the feeling of a full integration into the
community (Van Exem 1991).

Traditional sociopolitical systems extend from the village to the cluster and regional levels. Clusters
of 1020 villages constitute the next level of sociopolitical organization. Tribal people have a long
tradition of tribal-governance systems, which conflicts with the conventional wisdom of
recognizing them as a homogenous group. Government devolution programs to panchayat raj
institutions through PESA or sector-driven programs such as JFM do not usually recognize the
unique characteristics of tribal people.

17
Livelihoods in forest communities relate to improvements in financial, natural resource, human, social, and
physical capital. (see appendix 5).

21
Results of Focus Groups and Community Surveys
Focus groups and community surveys of forest dwellers were conducted in eight villages in Assam
and six villages in Jharkhand. For Madhya Pradesh, previously conducted case studies and other
research were reviewed to obtain the perspective of forest dwellers. (More details on the case
studies are provided in appendix 5.)

Livelihood patterns in the three states vary. Tribal communities have a strong spiritual and
economic relationship with the forest and a strong perception of their historic land and forest rights,
even if these are not recognized under current legislative frameworks. Tribal groups have been
living in and around the forests for centuries, practicing hunting and gathering activities, fishing,
shifting cultivation, and more recently, settled cultivation, as primary means of subsistence.
Although farming is now the chief source of livelihood for most settled tribal people, agriculture
has not given them a sense of security. The main reasons include the small size of their farm
holdings; low productivity, due to inefficient agricultural methods and lack of water for two crops;
and the constant threat of wild animals (such as elephants). To avoid starvation, the most destitute
may clear forest patches or engage in seasonal cultivation (slash and burn), even though they realize
that the size of forest resource upon which they depend for subsistence needs is limited.

In Jharkhand, smallholder farming dominates, with forests serving as a safety net. Tribal
people account for 80100 percent of the population in all but one of the six villages studied.
Inadequate provision of water for drinking and irrigation is a common feature in all the villages.
The livelihood system is mainly agrarian, complemented by income from wage labor. On average,
agriculture is the primary occupation in 60 percent of all households, and another 32 percent of
households work as paid labor in agriculture and elsewhere. In some villages, as a result of the
availability of alternative opportunities (particularly wage labor), many people have shifted away
from the use of forests as a primary occupation. All of the communities use the forest, but they do
so mainly for subsistence fuelwood and fodder. Fuelwood supplies an average of 86 percent of
energy needs. Fodder from the forest provides about 55 percent of input requirements for domestic
livestock. Gross values are Rs2,356 for fuelwood and Rs8,507 for fodder per household per year.
Nontimber forest products are used mainly for subsistence purposes, although some villages report
periodic sales of a few products in local markets. Commercial sales of forest products are minimal,
due in part to poor access to markets as a result of degraded roads, community isolation, low levels
of forest production, and poor awareness of markets outside of local trading areas.

In Assam, smallholder farmers and shifting cultivation are dominant. The eight villages
surveyed include a mix of smallholder farmers, people engaged in shifting cultivation, and landless
people. Tribal people live in only five of the eight villages surveyed. The level of infrastructure and
development is similar to that in Jharkhand, although villages have only about a third as many
people. Across the eight villages, 76 percent of households report agriculture as the primary
occupation, significantly higher than in Jharkhand. All eight communities use the forest, primarily
for subsistence fuelwood and fodder. Fuelwood supplies an average of 79 percent of energy needs.
Fodder from the forest provides about 64 percent of the feed requirements for domestic livestock.
Gross values were Rs2,440 for fuelwood and Rs10,992 for fodder per household per year. Poles
play a minor role in forest livelihoods; the gross value of bamboo is almost nine times that of poles
for domestic construction. Most communities collect a variety of nontimber forest products, mainly
for subsistence use.

22
In Madhya Pradesh dependence on the forest is low across income groups. Forest-based
communities, in particular tribal communities, are among the poorest and least developed in the
state. A survey of 40 villages in Krishna and Kurnool found that tribal people constitute 68 percent
of the village population, well above the rate in Assam and slightly higher than the communities
surveyed in Jharkhand (Alsop and others 2002). About 55 percent of the villagers surveyed have no
education. Agriculture, forests, and labor constitute the primary livelihood systems, with livestock
and fish-rearing closely integrated into the farming systems. Service provision, small-scale
processing, and marketing also play important roles among a number of artisan castes and tribal
groups.

A seminal study by Narain

Figure 4.1. Sources of Permanent Income in Jhabua 2001
and others (2005) in the
Jhabua district measures
70
specific components of 60

% of Total Income
annual household income 50
and subsequent dependence 40
30
on natural resources, 20
including forests. As 10
0
household income -10
increases, the share of -20
income from agriculture Low est 25-50% 50-75% Top 25%
25%
declines, offset by increases
in wage employment and Perm anent Incom e Quartiles
home enterprise income
(figure 4.1). For the lowest Agriculture Livestock Natural Resources
Enterprises Employment Financial Business
quartile, which includes the Transfers
poorest marginal farmers
and landless people, Source: Narain and others (2005)
agriculture accounts for
more than 60 percent of
permanent household Figure 4.2. Share of Permanent Income of Selected Natural
Resources in Jhabua 2001
income; employment
accounts for another 25 60
percent. The share of
Natural Resources Income

permanent income from 50

natural resources is fairly 40
Shares (%)

stable across the four

30
income quartiles, at 78
percent. As a percentage of 20
income from natural 10
resources, income from
0
fuelwood declines as Lowest 25% 25-50% 50-75% Top 25%
household income increases
Permanent Income Quartile
(figure 4.2). This is due
largely to the fact that other
Fuelwood Poles Fodder Other
forms of energy (liquid
propane gas, electric Source: Narain and others (2005)
generators) become more
affordable as income increases and the opportunity cost of the time spent collecting fuelwood
becomes too high. A similar pattern is found for other natural resources, including nontimber forest
products. For the most part, these products require intensive collection efforts to yield what is, in

23
the absence of value addition and access to more efficient markets, usually a low-value product.
The share of fodder income from natural resource income increases with household income largely
because richer families own more assets in the form of livestock.

Vedeld and others (2004) synthesize research case studies on forest dependency in Asia, East
Africa, and Latin America. Their results show that the average share of environmental income out
of total household income ranges from 5 percent to 42 percent (table 4.1). The Jabhua case study in
Madhya Pradesh finds a share of permanent natural resource income from total household income
of 78 percent, slightly above the lower values suggested in table 4.1. The forest environmental
income in the lower case of $173, equivalent to about Rs7,800, is far above the values found by
Narain and others (2005) in the Madhya Pradesh studies.

The livelihood Table 4.1. Characteristics of households deriving low, medium, and
opportunities in forest high proportion of income from the forest
communities varies. Share of Total Household
Agriculture, forests, and Income from Forest
labor all contribute to Item Products
rural livelihoods in Low Medium High
forest fringe areas in (5%) (19%) (42%)
Assam, Jharkland, and Annual forest income (US$ PPP) 173 743 837
Madhya Pradesh. The Education levels (years) 6.4 4.8 4.4
degree and nature of Distance to market (kilometers) 22 7.9 34.7
Source: Vedeld and others (2004).
dependence on forests
and livelihood options
differs from one community to another. Villages closer to towns tend to rely less on forests for
livelihoods and more on agriculture and wage labor. Villages in more remote areas tend to rely
more on agriculture and forestry. Communities examined in this study earn very little cash income
from forests. Subsistence products, in particular fuelwood and fodder, are the main contributors to
local livelihoods from the forest.

Sustained and legal timber harvesting could yield significant revenues to some communities
(box 4.1). Timber is not a major contributor to household income in any of the communities
studied. In all three states, the livelihood potential of forests remains underutilized, and the forest
offers little hope of escaping poverty.

Improving forest livelihoods in Box 4.1. The Unrealized Potential of Timber for Increasing
the Income of Forest Dwellers
most communities in India must
be integrated into broader rural
Given a high-quality sal forest under sustained
livelihood initiatives, such as
management and a selective harvesting system, a
agriculture intensification and
community could likely remove five cubic meters a year of
marketing. Lessons can be learned
sawlogs, even under conservative assumptions about forest
from other Asian countries, such
productivity. With just 20 hectares under production, a
as China, where community/farm
community could earn annual gross revenues of Rs750,000,
forestry has been very successful.
based on an average market price of Rs7,500 per cubic
In 158 counties in southern China,
meter. Shared among 100 households, this represents
farmers earn as much as 40
additional income of Rs7,500 a year.
percent of their total income
through commercial sales of Source: Background studies, authors calculations
timber, poles, and pulpwood
(Peoples Daily Online 2004).

24
Community-Based Forestry Institutions in India
Community-based forestry in India is characterized by three broad types of institutional
approaches (Ghate 2003). The first is based on self-initiated or self-governed traditional
community institutions, which manage surrounding forests without government interventions.
Tribal communities often have a long-standing traditional body that responds to external threats to
the local forest. These institutions normally encompass the major users of local forest resources in
making and adapting rules concerning inclusion or exclusion of community members, appropriation
strategies, obligations of participants, monitoring and sanctioning, and conflict resolution (Ostrom
1997). This approach is based on a common understanding of forest conditions and sustainable
forest use. The second approach is based on community support organizations, organizations from
outside the community that work with a community to build on local institutions to improve
sustainable forest management. Before formal JFM programs were established, community support
organizations worked with many communities through various donor-funded programs to build
social capital through social mobilization, group formation and training. In some cases, the
community support organization could act as an intermediary with government. The third approach
is JFM, under which the government engages with communities to improve forest conservation.
Local leadership appears to be a strong factor to support institutional change under JFM.

While no best model exists, lessons can be learned from studies of community institutions
associated with forest management in India (see appendix 6 for details). Self-initiated groups can
increase understanding of rules and regulations, particularly if the rules and regulations are
developed by the group and not by outside interests. Assistance from community support
organizations seems to be critical in building local institutions and confidence to deal effectively
with government over local forestry matters. Technical and financial assistance may best be
provided by government.

Of the 14 communities surveyed in Assam and Jharkhand, 8 had a registered JFM committee. Of
these, three JFM committees replaced an existing self-initiated committee. The six communities
without JFM committees were managing local forests through a traditional governance system,
often led by a headman or village head, in some cases with the support of a small committee or
village council. Some of these institutions had been working for more than two decades. These
findings complement a number of global studies that have found examples of effective self-initiated
community forest management through internal institutions, with equitable allocation of benefits
over long time periods (Mckean 1992; Ostrom 1992a, 1992b; Agrawal 1999; Tang 1992; Baland
and Plateau 1996; Sunderlin and others 2005; Wade 1994).

Not all cases of self-initiated community management have been successful. Traditional
community institutions can break down in the face of economic change, rent capture by elites, and
external pressure on the forest. In villages in which a traditional tenure system is still prevalent (no
JFM), villagers are often reluctant to share the management of forest resources with the forest
department. Under JFM traditional village heads may not retain their perceived traditional power if
the forest department exercises effective control over the committee and most forest management
decisions. Defining community forest boundaries is another critical factor. Where boundaries are
not clear, encroachment issues can more easily arise. Lack of contact with forest department field
staff may also contribute to failure. In a recent pilot survey of service delivery in Jharkhand, only
34 percent of respondents in rural communities had interacted with a forest guard or ranger in the
past two years (Public Affairs Foundation 2004). Where the traditional self-initiated forest
management system has become less effective over the years due to various factors, people often
look for support and resources from outside agencies to help protect their forests. In the case of
state-controlled land, improved access of forests, either through self-initiated efforts of the village

25
or through subsequent recognition in the JFM, has been a common motivator for people to protect
forests. This is not a reflection on the status of forests or their management, as it was found that
self-initiated protection institutions originated primarily in response to the degraded state of the
forests, in both state-controlled and community-managed forests.

Forest management with communities in India will remain a huge challenge (Ghate 2003).
Although JFM offers one approach for improved forest managementand on many counts has
been successful in fostering forest conservationit appears to be overly rigid in terms of
addressing social and institutional conditions across different communities. The uniform application
of a single JFM model that fails to account for geographical variations, tribal people, social and
economic inequalities, decentralization, traditional community institutions and governance systems,
and differing cultural backgrounds among communities is not likely to succeed in addressing long-
term forest sustainability and poverty reduction. More flexible models based on general guidelines
are needed that allow for significant decentralized approaches in actual field implementation with
communities.

Local Perspectives on JFM in the Three Focal States

Forest dwellers in Jharkhand have several serious concerns about JFM. Community member
cite the lack of involvement of the tribal population in JFM meetings and activities and the lack of
awareness by villagers about JFM guidelines, rules, and regulations and development work being
implemented in their villages. Tribal-dominated communities expressed a number of concerns
about the process through which JFM committees are formed. There is a common perception that
JFM creates rules that neglect existing and prudent uses of natural resources, local knowledge, and
cultural contexts. There also appears to be a lack of consultation with tribal people in the process of
JFM formation. Many villagers view JFM as a top-down, nonparticipatory process. Participation in
the micro-planning process is weak, with villagers needs not fully acknowledged in the preparation
of micro-plans. In some villages surveyed, people had no idea that a micro-plan had even been
prepared, let alone any knowledge of what was in it. Villagers were aware of the lack of legal status
of JFM committees, which can, in theory, be dismantled at any time by the forest department.
Suspicion prevails with regard to sharing of information, sharing of benefits, and maintenance of
minutes, records, and accounts. In mixed villages, tribal people fear that the process of restricting
access to outside users and regulating forest use among a defined group of people will further
marginalize them. The process of JFM formation can exacerbate existing social tensions between
tribal people and nontribal people, among tribal people, and between JFM and nonJFM villages In
general, the case studies seem to confirm Kumars (2002) finding that JFM may reflect the
preferences of nontribal people.

Villagers in Assam are more positive about JFM. JFM is new to Assam and is being
implemented in only a few divisions. Support for JFM in the villages surveyed is strong. Villagers
believe that the program will facilitate participation, collaboration with the forest department, and a
greater degree of resource ownership. They also believe that youth employment and income
generation options will reduce the illegal harvesting of forest resources and improve sociopolitical
conditions. Villagers note the need for mass awareness campaigns to facilitate participation and
support for JFM. Also needed is coordination among stakeholders (local people, the forest
department, the district administration, and community support organizations). Villagers believe the
program is effective in reducing intervillage conflict, as conflict resolution requires the presence of
a key leader and appropriate support structure. JFM would facilitate and strengthen the
collaboration between the village headman and the forest department, thus forming the basis for
effective authority to resolve conflicts. In villages in which micro-plans are being formulated and

26
entry point activities are being carried out, there seems to be high degree of support. Villagers,
however, have a low level of understanding about benefit-sharing mechanisms and management of
the JFM committee fund, probably because the system was in its initial stages at the time of the
interviews. They expressed the need for forest conservation with government assistance to counter
the impact of smugglers and timber mafia.

Institutional processes and transparency in Madhya Pradesh are mixed. In their study of 40
JFM villages in Madhya Pradesh, Alsop and others (2002) found that only half of committee
members attended meetings regularly. Primary reasons for the low turnout included lack of advance
information about the meeting and lack of time to participate. Among people who did regularly
attend meetings, more than 90 percent indicated that they had opportunities to participate in
discussions. The majority of members were unaware of how group funds were used. More than
two-thirds of respondents had no awareness of the availability of funds through JFM, the amount of
funds available, or what they were spent on. More than half of members surveyed indicated that
they had no knowledge of JFM rules governing group business. Respondents also expressed
concern about the equitable distribution of forest benefits. They noted that many villagers
participated in user groups in order to receive individual benefits, not as a means of facilitating
collective action for conservation or development. This raises the question of whether the JFM
model of co-opting all adult villagers rather than creating a user group made up only of interested
and committed villagers leads to sustainable local institutions. The study suggests that there are
significant differences in the social capital value of organizations depending on whether the
organizations are externally motivated or evolve locally. Social capital is a complex concept;
formal government-sponsored organizations such as JFM committees often do not make up the
appropriate mix of community associations and networks.

A World Bank study (2005b) of 30 JFM villages in two districts supports some of the findings of
Alsop and others. Focus groups suggest that information availability and awareness of JFM is low,
particularly about funding arrangements and transparent accounting. Singh and Sinha (2004)
surveyed legislators for their perceptions of JFM as expressed by rural constituents. The legislators
found that among villagers who were aware of the JFM committee, less than half attended meetings
regularly, due to lack of time or information. Women tended to be marginalized in meetings and
decision making processes. A fairly high proportion of people were aware of the JFM program in
their community however, particularly where the Bank had been providing support.

There are no state-level institutions to represent communities involved in JFM. In the three
states surveyed, communities did not have a state-level association that could represent common
interests with government agencies and legislators. A broad and effective association could help
level what is clearly an uneven playing field with government agencies with respect to JFM as it
continues to evolve. Tribal groups are represented to some degree; a tribal association exists in
Jharkhand, for example, but it represents communities in scheduled areas rather than people in all
forest fringe communities.

These results are not unique to the three states studied. Pingle (2004) reviewed communities
and JFM in one forest division in Andhra Pradesh. The author found notable successes, such as
some sharing of timber revenues, empowerment of women, and creation of community assets such
as check dams. But the program also suffered from lack of transparency of accounts, lack of trust
between villagers and the forest department, and excessive control by the forest department.

27
Forest Livelihoods and Linkages with Rural and Tribal Development in
the Three Focal States
Forest-based communities are not benefiting from integrated rural development. Most forest-
fringe communities depend primarily on agrarian-based economies, with forests playing an
important supporting role by providing subsistence fuelwood, fodder, and limited nontimber forest
products on a seasonal basis for some people and serving as a safety net for others. Until
communities are able to access better quality forests for timber and commercial nontimber
products, either from standing forests in the short term or as degraded forests mature in the
intermediate term, agriculture development will be vital to lifting the poorest segment of the
population out of poverty.

Agriculture and forest development initiatives in remote forest fringe communities must be
complemented by infrastructure development (roads, electricity); health and education
improvements; and development of social capital in communities. Field surveys suggest that
rural development agencies other than the forest department do not always reach remote forest
fringe communities or provide service in an effective manner. While state forest departments do
have a field presence (albeit thinly spread) in remote forest areas, they lack the mandate, resources,
and training to deliver broader rural development programs. Field evidence suggests that forest
departments are gradually building trust and respect in more remote forest areas through FDA
programs that include modest entry point development activities. Villagers participating in JFM
expect some tangible economic returns from the forests in the near future. Most villagers do not
distinguish between organizational boundaries; they see the local forest officer as the representative
of the government and expect him to help in local development needs (Tiwary 2004). State
agencies with a clear mandate for rural development have the required expertise and larger budgets
than forest department, but they do not provide effective service in remote areas.

Two parallel systems exist for rural service delivery, with forest communities in the middle.
Compounding the service delivery issue is the sometimes poor integration between forest
departments and more traditional rural development agencies. Forest development to remote forest
communities (on state forest land) is handled through the FDA system. Agriculture and rural
development funds flow to communities on revenue land in less remote areas mainly through the
District Rural Development Agency system. In the Forest department, staff expressed concerns
about the limited involvement of rural development agencies within the FDA structure. Rural
development agencies express similar concern that collaboration with the forest department is not
as strong as desired. Having in essence two parallel systems for rural development imposes major
transactions costs and limits communities from accessing investment funds and expertise for
broader rural development that includes both forestry and nonforestry initiatives.

28
 5. Forest Management Systems
and Community-Based Forestry

Resource Assessment and Planning Systems

Effective management planning and inventory are critical features of sustainable forestry.
Sustainable forest management depends on a strong underlying policy and legal framework,
efficient property rights, clear management goals with provision for stakeholder consultations,
competent management institutions, and effective long-term planning. Long-term planning requires
a good understanding of the state of the forest resource for a specific area and how and why it is
changing over time. Basing forest policy and management planning decisions on weak resource
inventory information can result in unsustainable resource use, with long-term consequences on
forest health, biodiversity conservation, and the socioeconomic welfare of forest-based
communities, both large and small. 18 Studies in the three states identified a number of resource
assessment and planning issues that hinder communities from assuming greater responsibility for
forest management and at the same time, providing sufficient information and confidence to state
forest departments to allocate more responsibilities to communities.

Poor inventory data are limiting planning effectiveness. Assam, Jharkhand, and Madhya
Pradesh are at different stages of development with respect to their forest resource assessment and
management planning systems and the working plans that must be approved by the Ministry of
Environment and Forests. 19 Madhya Pradesh has 97 percent of its working plans approved,
Jharkhand has 52 percent, and Assam has 25 percent (table 5.1). Without an approved working
plan, harvesting of standing timber is prohibited under past Supreme Court rulings. The higher level
of plan approval in Madhya Pradesh reflects the forest departments progress in establishing forest
resource assessment systems and engaging in forest management planning relative to the other two
states. Management plans in Madhya Pradesh are supported by reasonably adequate forest
inventory. By contrast, Jharkhand is constrained by weak forest resource data and information
management systems. Robust growth and yield data, essential to estimate current and longer term
forest structures and sustainable timber harvests are almost nonexistent in the working plans. There
are no functioning permanent forest sample plots in the state that provide ongoing and reliable
stand-level data to develop local
growth and yield models. Table 5.1. Working Plan Approval In Focal States
State Number Plans Approved Pending
Consequently, the forest department
of by Ministry of or
is unable to provide robust estimates Divisions Environment and under
of the forest age class structure, Forests Revision
spatial distribution across tenure Number Percent
types, site index, growth and yield, Madhya 62 60 97 2
stocking, regeneration, or mortality Pradesh
at division levels, which could then Assam 28 7 25 21
be aggregated to a state-level Jharkhand 25 13 52 12
inventory. The lack of data makes it Source: Background studies
difficult to make accurate estimates
of current and projected resource supply, even for the main timber species, such as sal. Assam is in

18
See appendix 7 for attributes of effective forest management planning and the general approach in India.
19
Working plans are the primary mandated management plan for states. They operate at the division level and
are revised every 10 years.

29
a similar position, but it is encouraging to note that the forest department sees a way forward
despite its severe financial constraints. The Assam forest department is making good (albeit
limited) use of new technology to establish a good inventory baseline.

Resource assessment systems at the community level are weak. Micro-plans associated with
JFM programs do not provide communities or local forest department staff with sufficient
information for effective management and regulation of JFM forests to meet multiple demands and
livelihood opportunities. 20 Inventory work undertaken by forest department field staff as part of the
micro-planning process generally consists of one or two short transects for visual surveys to note
major forest cover types and general condition (good quality, degraded, and so forth).
Measurements are not taken as part of a more systematic inventory process, in which sample plots
(random or spaced along transects) would be used and key species in each plot recorded for tress of
different ages, diameters, heights, numbers of stems, and quality. Silviculture prescriptions are
based on broad working plan prescriptions, which are often based on poor inventory and growth
and yield models. While more intensive inventory systems for JFM are costly, better quality
resource information is critical. Given the low quality of resource information generated by the
current system, it is difficult to see how micro-plans can properly guide local management
decisions for either timber or nontimber products.

Nontimber forest product inventory systems are very weak in all three states. Field surveys for
micro-planning do not routinely gather nontimber product data, even for products that are
significant sources of revenue, such as kendu leaf in Jharkhand and Madhya Pradesh. In some
ways, this is not surprising. Many nontimber forest products are short lived and seasonal; for others,
the supply is highly irregular from year to year. Fruit and flower crops on trees are difficult to
estimate even in sophisticated orchards. For some commodities, such as exudates bled from trees,
vines, or agarwood, the available stock can be estimated only by destroying some crops. Perhaps
more important, in all but a few cases, no production or yield models are available as a guide for
measured performance. Each state has small amounts of data for certain nontimber forest product
species, but in many cases the data are old, are fairly site specific, and have not been replicated. 21
While periodic biophysical studies have been conducted for various species in some states, such as
Assam, there is no systematic approach to collating this information or collecting new field data.

Plans lack sufficient attention to markets and economic analyses. Although working plans
provide estimates of resource supply (with varying degrees of reliability), there is a serious
deficiency in market information and demand forecasts for key timber and nontimber forest product
species. A major contributor to the problem is the fact that state forest departments do not as a rule
have a policy and economics unit, which could potentially provide management planners with
market intelligence from a variety of sources for state, national, and international markets, at least
for key species. Micro-plans appear to lack any kind of market analysis. This is unfortunate, since it
is market access that will largely determine whether or not the community will be able to increase
productivity and generate increased income from the managed forest.

Poor mapping constrains more effective forest management planning in the three focal states,
particularly in Jharkhand, local cadastral and topographic maps used to develop forest base maps
for working plans are 2030 years old. Soil maps are also often outdated. The lack of reliable maps
means that forest tenure cannot be determined with any accuracy in each division, putting long-term
investments in forest stocks at risk in areas where boundary uncertainty exists. It is difficult to link

20
Micro-plans are the community-level management plan. They have a 10-year outlook and are implemented
through annual operating plans.
21
In Assam several surveys were undertaken of nontimber forest products in the late 1970s, but the surveys
were not conducted on a regular basis. They have not been updated in many years.

30
existing site-specific forest resource data, such as data from micro-plans, with precise geographic
locations in each division. To address this issue, the forest department has established a small
central Geographic Information System (GIS) unit in Ranchi, but the system remains in the
prototype stage.

In Assam the development of GIS is one of the stronger points of the inventory program. For
several years all maps attached to divisional work plans have been derived from GIS systems, and a
number of officers are moving up the learning curve. Some of the initial digitizing has been
subcontracted to another state-owned but semi-commercial agency, to which an experienced forest
department working plan officer has been seconded. Financial constraints are limiting progress,
however.

In Madhya Pradesh existing stock maps are kept reasonably up to date through the ongoing working
plan effort. A program is currently underway to combine all necessary geographic information into
a GIS for the forest lands in the state.

In all three states, assuming GIS capacity increases, developing efficient mapping capacity to
support JFM will be a much bigger job than work at the divisional scale. Serious capacity and
funding constraints undermine efforts to transition to more modern forest management support
systems.

Management information systems (MIS) need significant upgrading. A well-structured

computerized database of information is essential to compile inventory, production, market, and
financial data for queries, reporting, and analyses. MIS for forestry is complex because of the long
rotation period for some species, the need to build in predictive models for various silviculture
regimes, the requirement for evaluating management approaches, and the need to ensure non-
declining forest yields. The forest departments in Assam and Jharkhand are at the beginning of the
MIS development curve but lack sufficient internal financial resources and specialized expertise to
move forward. Madhya Pradesh made progress through previous World Bank support programs but
still has some way to go to be able to quickly provide information, such as the breakdown of forest
types and forest production in JFM and nonJFM areas. Even in Andhra Pradesh, where a
sophisticated GIS is operational in the forest department, the development of MIS has not
progressed much beyond simple aggregation of the most recent stock-taking in each compartment.
This restricts answering what-if queries to evaluate management alternatives.

Poor monitoring systems limit the ability of forest departments to track changes in the forest.
Deficiencies in forest resource assessment systems, mapping, and MIS make it difficult for state
forest departments to effectively monitor how the forest is changing in response to ongoing
pressures from people, fire, insects, disease, and altered land uses. In particular, there is a serious
information gap related to JFMrelated data (forest production, removals, value of production,
employment, income). Forest departments are not well equipped to gather, manage, analyze, and
disseminate community-level forestry information in a systematic way. As a result, the impacts of
forestry programs on livelihoods and poverty are not monitored, making it difficult for forest
departments to readily respond to public criticism that JFM is not improving community livelihoods
or addressing poverty. Instead, forest department performance tends to be measured against inputs
and targets, such as the number of communities registered for JFM, micro-plans completed, or
hectares of new plantations. There is a need to move beyond inputs and targets to measure
outcomes and impacts.

31
Forest Management Systems
The capacity of forest departments to model forest stand development is weak. Forest
management prescriptions for core timber and nontimber species in both JFM and nonJFM areas
must be guided by more robust silviculture models, based on high-quality resource information and
research. Forest departments at the state level in the three states studied employ a number of
standardized silviculture models for high teak and sal forests and coppice in various states of
understocking. Generally, the better stocked areas are slated for rehabilitation, using protection
against grazing and natural (coppice) regeneration; gaps in more depleted areas are restocked by
artificial regeneration, using presprouted stumps. These models are very traditional, aiming at
restoring even-aged forest architecture, with few innovations to meet changing livelihood needs of
communities. Developing commercial teak plantations on degraded forests can affect nontimber
forest products. Kendu leaf production can decline as the canopy cover increases (Hill and Shields
1988). Defining the optimal mix of teak or sal overstory and nontimber product understory is
critical to developing JFM and meeting local needs. Strengthening capacity in yield modeling will
require better growth and yield information. While the Madhya Pradesh Forest Research Institute at
Jabalpur has an ongoing program of growth and yield data collection, the methods employed are
geared toward classical forest architectures. Both the layout of permanent plots and the methods for
analysis and modeling need to be strengthened to better predict the outcome of new silviculture
regimes. Similar exercises should be extended to yield regulation techniques for nontimber forest
products that will guide management practices that are locally appropriate, cost-effective, simple to
use, and reliable (Maharjan 1998).

Micro-plans are still driven largely by general working plan prescriptions. Broad rule of
thumb prescriptions for major forest cover types from the division-level working plans provide a
quick reference for forest department field staff to identify silviculture treatments for the JFM
forest, but they may not always be the best site-specific prescriptions to manage secondary local
species for community livelihood needs. A study in Orissa suggests that a traditional focus on
managing a sal dominant monoculture for timber or the adoption of inappropriate management
practices for other nontimber forest products can endanger the longer term sustainability of the
forest (Bhattacharya and Prasad 1998). 22

Private sector space for JFM planning needs expansion. All three states lack opportunities for
private sector forestry consultants to engage directly with communities in the forest management
component of micro-planning. This puts added pressure on limited forest department field staff to
undertake this function in addition to their other duties.

Forest Department Capacity and Community-Based Forestry

Human resource capacities at the field level vary across the three states. Service delivery
usually begins with the range forest officer, who is normally in charge of organizing JFM
committees, helping prepare the micro-plans, and overseeing their execution. Range officers may
be secondary school graduates with two years of technical forestry training or individuals with
slightly lower standards of education who have been promoted over time. Each range officer
usually supervises four to six beat officers (also called foresters), who assist in the production of

22
Sal is a dominant species in Jharkhand and Madhya Pradesh. Although it is not the dominant tree species in
Assam, it is the main source of sawlogs. The lessons of the Orissa study could relate to other forest stand
types, such as teak, where certain nontimber forest products grow in the understory of mature and semi-
mature stands. See appendix 8 for more details.

32
JFM micro-plans and annual work plans. In current JFM models, the forester is the member-
secretary of the JFM committee, operating the JFM savings account jointly with the president of the
committee and keeping and maintaining monthly receipt and expenditure accounts. Foresters are
secondary school science graduates. They receive one year of training at departmental training
institutes in each state. Forest guards are the departments field presence in the community. In
addition to assisting the village committee and forester in the execution of their duties in JFM, they
are also supposed to focus on enforcement. They will normally have at least a grade seven
education plus six months of technical forestry training.

The numbers of field staff

Table 5.2. Field Staffing of Forest Departments in Assam,
(deputy range officers, Jharkhand, and Madhya Pradesh
foresters, forest guards) in Madhya
each of the states ranges from Item Assam Jharkhand Pradesh
950 in Jharkhand to 16,550 in Number of field staff 5,089 950 16,550
Madhya Pradesh (table 5.2). 23 Recorded forest (millions of 2.6 2.3 7.5
The higher echelons (from hectares)
principal chief conservator of Field staff vacancy rate 10 34
forests down to DFO) in the (percent)
forest department are Indian Forest area per staff 514 2,421 453
Forest Service graduates and (hectares)
in state Forest Service Note (-) Not available.
categories. 24 These
professional groups are Source: Background studies
reasonably well staffed. The largest staffing gaps occur in field positions of forester and forest
guards. In Jharkhand 34 percent of positions are vacant; in Assam the figure is 10 percent (data are
not available for Madhya Pradesh, where the department is restructuring). Each field officer is
responsible for a large block of forest and a wide range of management and oversight functions in
the current JFM model. The data and field interviews suggest that one forest department officer
cannot effectively cover such a large area for all the broad functions currently mandated, including
inventory, monitoring, protection, oversight of JFM planning and implementation, enforcement,
particularly given the lack of field equipment, maps, and transport. 25 Overcoming these issues at the
field level by trying to establish new positions is difficult, due to general restrictions on state
government recruitment or, in the case of Madhya Pradesh, staff reductions in response to fiscal
pressures. None of the forest departments had undertaken a comprehensive strategic planning
process to guide internal organizational reforms in response to the changing biological, business,
economic, social, and political environments. Very few women hold field positions, making it
culturally difficult for the department to work with village women involved with forestry activities
such as collecting fuelwood and nontimber forest products. In Uttar Pradesh, for example, only 8 of
200 Indian Forest Service officers are women; at the forest ranger/forest guard level, there are no
women officers on staff.

23
Madhya Pradesh is in the process of reducing staff numbers as part of government structural reforms.
Current posts have been reduced from about 38,000 to 21,000. The proposed goal is about 18,000 posts.
24
Indian Forest Service officers represent a national service, with extremely competitive recruitment from
across India. They are deployed by the Ministry of Environment and Forests in Delhi and in state forest
departments in senior positions (graduates may also be appointed to public service posts outside forestry).
State Forest Service (or Department) staff are not Indian Forest Service graduates; they tend to occupy lower
level positions in the state forest departments.
25
Forest Guards, for example, usually provide their own bicycles for transport. They normally do not have a
field kit, consisting (at a minimum) of a local forest cover map, compass, measuring tape, notebook, and
pencil. Field offices also lack basic inventory equipment, such as a survey chain, a diameter tape and
clinometer for measuring tree size, and an increment corer for measuring tree age.

33
Many field staff lack advanced forestry knowledge and skills for JFM. The average field staffer
is about 50 years old. Most have little if any, training in modern techniques of community-driven
development, such as participatory planning, social mobilization, and group formation. Many forest
department staff does not fully understand new concepts of rural livelihood development and how
forests can address poverty (box 5.1). Extension service delivery is quite poor in most cases, due to
lack of transport, overstretched field staff, and the fact that practical research results are rarely
geared to community problems.

Box 5.1. Field Realities and Operating Constraints Facing District Forest Officers

Most lower level field staff have an enforcement mindset that makes it difficult for them to adjust to a new
role as facilitator/negotiator of JFM activities. They perceive JFM as an erosion of their authority. They
therefore often mechanically go through the motions, in the hope that JFM is yet another fad that will
disappear in a few years. Motivating staff to break out of their traditional mindset is very hard and takes time.
There is no incentive for officers or staff to work on JFM activities, since their performance assessment does
not depend on the success of JFM.
Even for honest lower level officers, enforcement activities offer a sense of power and status. For others
enforcement offers an opportunity for rent-seeking behavior. It is natural that over time, a distortion of
priorities has taken place in favor of risk-free enforcement-related activities.
Lack of fresh recruitments, poor opportunities for career advancement, and little improvement in technical and
management skills have contributed to low morale and development of a passive attitude among many field
staff.
The impact of JFM can be felt only after several years, while the tenure of a DFO is usually less than three
years. There is no guarantee that the officers successor will sustain the work with the same tempo and spirit.
The fact that officers may not see the fruits of their labors reduces their motivation to implement JFM .
In many places, field staff work under extremely hostile conditions, without adequate resources. Low-level
11. officers
Capacities for economic
protect thousands analyses
of hectares of forestsofwithout
forestanymanagement are weak. State forest
arms or vehicles.
Boundary
departments anddemarcation
the Ministryis one of the major factors
of Environment leadinghave
and Forests to increased encroachment
weak capacity and economics
in forest litigation over the
ownership of the land. Old forest maps do not coincide with current revenue
to undertake analyses to support more efficient forest establishment and longer term managementmaps; the forest departments
initiation for joint inspection of disputed areas usually meets with a lukewarm
during micro-planning. None of the three state forest departments reviewed had a full-time response from the revenue
economist on staff. The Ministry of Environment and Forests has one person with advanced many
administration, mainly because they remain overburdened with other pressing problems (for example,
revenue officials also function as the territorial executive magistrates).
economics training, but most of his time is spent in nonanalytical functions, such as maintaining
Most villagers or tribal people have no documentary evidence of their existing rights on the forests. This
statistics and developing administrative reports.
makes it difficult for DFOs to set objective criteria for sanctioning tenure rights, and it leaves them vulnerable
to political pressures.
The micro-plan is an important planning document whose preparation requires care and attention. In practice,
however, because of lack of time and technical expertise and the resistance of some field staff to seek external
assistance or collect data, the plan is just another routine document rather than a real planning tool. DFOs are
generally busy with other departmental activities and are not given enough time to scrutinize plans. (On
average up to 40 percent of a DFOs work time can be spent on forestry-related legal problems, including
attending court.)
The working plan, which is the basis for micro-plan prescriptions, should be an important strategic planning
document for the department. In general, however, working plan officers do not have independent resources.
They are required to share the division resources and are totally dependant on the local territorial DFO.
Naturally, officers are not motivated to work as working plan officers and can view doing so as a punishment
posting.
In general, the forest department lacks technical knowledge and information regarding recent developments in
agro-forestry, nontimber forest products, marketing, and other areas.

Source: Personal Communication from a forest department field officer.

34
Social Capital Building Processes and JFM
Current processes in JFM for building social capital are weak. The current JFM registration and
micro-planning processes give insufficient attention to social mobilization and group formation
within the community. In some cases the entire process of community engagement, committee
registration, and micro-planning can take as little as two weeks. As indicated in the previous
chapter, local institutional and governance structures in forest fringe communities are complex,
particularly among tribal groups, where informal systems for managing local forests may exist.
Community capacities are often very weak, given high levels of illiteracy.

Assam is just beginning to climb up the JFM learning curve, building on forestry experience in
states such as Andhra Pradesh and Madhya Pradesh, as well as other sectors in India in which
community-driven development is a central feature. 26 Jharkhand has gained limited exposure to
better approaches using community support organizations to integrate JFM communities with larger
donor-funded development projects. Madhya Pradesh has gained useful experience in social and
institutional development through World Bankfunded programs. With limited budgets, it has tried
to build appropriate skills in field staff.

The forest departments in Andhra Pradesh, Jharkhand, and Madhya Pradesh recognize that a more
comprehensive social capital building process would be beneficial. However, they are hindered
from applying a more robust approach by limited staff, inadequate social and institutional training,
and above all inadequate financial resources. While a process lasting several months and partnered
with community support organizations may build highly empowered and enduring community
institutions, it may not be realistic given current budget allocations to JFM social development. A
better approach however, is needed that provides for more comprehensive institutional assessment
in each community and strengthens social mobilization, group formation, appropriate training, and
confidence building. Stronger up-front investment in institutional development will reduce the risk
that JFM benefits are captured by village elites and poorer groups in society become marginalized
(Hill and Shields 1988). What is clear from the previous chapter and field examinations is that
imposing a one-size-fits-all JFM model on all communities, especially where multifaceted
traditional tribal institutions exist, is ill advised and will not build sustainable local institutions that
can support national and state forest conservation goals in concert with improving rural livelihoods
and equity. Such an approach also fails to provide interested communities with the skills and
expertise to gradually assume greater management and marketing responsibilities.

Conflict resolution under JFM needs to be more equitable. Conflicts always arise in natural
resource management; different groups in society often disagree over objectives and values
associated with forests, how the forests are allocated, how they are used, who benefits, who bears
the costs, and so forth. These disagreements are exacerbated in India, where population density is
high; some rural groups such as tribal people, have strong links to the forest; and emotional and
political issues surround land and forests. Formal mechanisms under JFM for resolving conflicts
between communities and forest department are heavily weighted in favor of the government. In
general, the local forest department officer has the authority to arbitrarily resolve conflicts between
the community and the department, in the extreme by disbanding the JFM committee. Field
examinations in all three states indicate that many field officers work very hard to resolve conflicts
informally and fairly through dialogue, usually with positive results. However, an underlying
system that ensures a balanced and equitable resolution of conflicts between a community and

26
A small team visited Karnataka to learn from the Bank-funded Karnataka Watershed Development Project,
a major initiative in five districts that focuses on soil and water conservation and livelihood improvements
though community-driven development.

35
forest department is not in place. Furthermore, conflicts between communities are common, but
JFM does not provide a simple mechanism to address these conflicts. As noted already, unclear
boundaries lead to chronic conflict and court actions. all of which consume considerable staff time.

Decision making processes regarding alternative land use are weak. Conflicts occur between
communities and alternative economic land uses, such as mining, particularly in states, such as
Jharkhand, that are rich in subsurface minerals. Forests have multiple values; in some situations
nonforest uses may be more economic. Field interviews with communities in Jharkhand indicate
deep frustration in some areas where small mining interests or other forms of industrial
development have encroached with impunity on what villagers perceive as their forest. This raises
questions about how decisions regarding alternative land uses are made in forest areas, the efficacy
of environmental assessment processes, and how communities are compensated for loss of forest
livelihoods. It as also brings to question how well informed villagers may be about their legal rights
over local natural resources and compensation processes.

Economic Incentives for Community Participation in JFM in India

Communities may not have strong incentives for making greater commitments to JFM. The
participation rate of communities in JFM is strong nationally, but many JFM committees may not
be fully functional. Moreover, many communities involved with JFM feel little sense of ownership
of the resource or the program. The main community benefits are minor forest produce. Although
JFM legitimizes and provides increased security and access to these resources, many communities
would be harvesting subsistence production without JFM. Without investments to improve
collection rates and value addition, JFM thus does not provide a true incremental benefit. Timber
harvesting and marketing, especially for nationally listed species, is managed solely by the forest
department, with the community providing labor for commercial harvests and ostensibly receiving a
share of net revenues through current and rather opaque benefit-sharing schemes. Coupled with the
lack of efficient resource use rights, communities tend to lack strong incentives to assume greater
responsibilities and make greater commitments toward long-term forest management as capacities
are improved over time.

Immediate incentives may also be weak for agro-forestry and homestead forestry. What are
the relative financial returns to villagers from using land in alternative uses? A villager in Assam
with homestead land faces
difficult choices (table 5.3). Table 5.3. Returns to Alternative Land Uses in Assam
Forests would not be the Crop Years to Net Sustainable Accumulated
crop of choice unless the First Revenue Costs before
Revenues at Full Production Revenues
land is unsuited for
(Rs) Accrue (Rs)
agriculture. Reasons
Rice 1 6,000 10,000
identified for low adoption
Vegetables 1 23,000 47,000
of agro-forestry include Patchouli 1 44,000 44,000
inadequate technical Bamboo 5 28,000 28,000
expertise within the Poles 20 23,000 23,000
Department of Agriculture Teak 60 4,000,000 67,000
and the forest department, Note: Accumulated costs for all options include initial preparation of
poor service delivery, poor land, which is a one-time investment. For crops such as rice and
coordination between vegetables, subsequent annual crop revenues would eventually recover
agriculture and forest these high investment costs.
departments, and lack of Source: Background studies
transport.

36
 6. Forest Marketing Systems, Benefit Sharing,
and Community Forestry

To sell their commercial production at fair prices, communities need access to an open and
27
efficient market. Creating such a market would generate higher revenues and offer a strong
incentive for communities to take on increasing responsibility for forest management and promote
more efficient forest utilization. A number of impediments currently restrict more open marketing
by communities. These include highly bureaucratic transit permits for many species, a legal
requirement to sell certain species only to state marketing monopolies, and a lack of information
about markets channels and prices.

A related issue is how revenues are shared. All state forest departments use a benefit-sharing
scheme as one means of retaining commercial revenues and returning a portion to communities for
rural development and forest conservation. This may not be the most efficient approach, especially
if communities are able to build internal capacities and increasingly engage in more direct
marketing of forest products.

Marketing of Specific Forest Products in Assam, Jharkhand, and

Madhya Pradesh
Timber

Timber is a relatively undifferentiated commodity in India, with competition for domestic markets
from overseas log suppliers in Indonesia, Malaysia, and Nigeria. The domestic industry is
characterized by low vertical integration, with small and inefficient sawmills processing a mix of
local and imported logs. State monopolies on high-value timber marketing provide effective
barriers to private sector log supply through legal harvesting. In Madhya Pradesh the primary
timber product is teak, marketed through auction at 38 major commercial depots across the state.
Interviews with sawmillers reveal general acceptance and satisfaction with the auction system. Over
the past three years, teak log prices have remained relatively stable and competitive with imports. In
Jharkhand field data show that administered prices from logs supplied from department depots are
significantly higher than the market price of logs imported from other states or even overseas
suppliers such as Malaysia or Nigeria. Government harvesting and marketing structures carry high
overhead costs, which need to be covered by log prices.

In Madhya Pradesh about 76 percent of the recurrent nonplan budget (or $65 million) is supporting
commercial timber production and harvesting structures. A critical point with the Madhya Pradesh
system is whether an approach accounting for Rs2.7 billion in operating costs, and financed by state
budget allocations (yet generating Rs3.8 billion in gross revenues), is the most efficient approach
from a public policy perspective. In Jharkhand and Assam, the same questions about the efficiency
of state production and marketing organizations apply, but on a much smaller scale.

Two important issues need to be addressed with respect to improving community livelihoods
through timber market systems. First, as communities gain experience and capacity in forestry, they

27
This chapter draws heavily on the field work undertaken by the consulting team in each state. See appendix
9 for abbreviated case studies.

37
will require more space to engage in direct timber marketing. This is currently hampered by weak
community capacity, lack of enabling structures and institutions to provide effective market
intelligence, and poor access to marketing channels within and outside the state. Second, the legal
framework restricts potential sales and movement of nationalized/listed products. This issue affects
timber supply from both communities and private farms. The laborious permitting system to
remove privately grown high-value trees, such as teak, provides a strong disincentive to private
commercial growing of trees on private land.

Kendu Leaves

Kendu leaves are of high economic value, because of their use in rolling bidi (country
cigarettes). 28 Throughout India kendu leaves and bidis are estimated to provide 106 million person
days of employment in collecting activities and 675 million person days in secondary processing.
Kendu is a nationally listed nontimber product, which means that all marketing must be done
through state forest departments, associated forest marketing corporations, or licensed traders
operating on behalf of the state.

The kendu market structure in Jharkhand involves interaction between the Jharkhand State Forest
Development Corporation (JSFDC), licensed traders who operate as middlemen between JSFDC
and communities and manufacturers, and insurgents. The first main payment along the value chain
is to the primary collector (village/ household collectors) by the trader. This payment is set by the
JSFDC annually in advance for the whole state as an averaged fixed amount per bag, irrespective of
quality. In 2003 this fixed collection cost was Rs425 per bag. The second main cost component is
the royalty payable by the trader to the JSFDC, which in 2003 was Rs168. In between the initial
purchase of kendu leaves in the field and the final sale to bidi manufacturers, a number of formal
and informal taxes exist, ranging from state taxes of Rs40 per bag to extortion payments to
Naxalites of about Rs60 per bag. 29

In contrast, the Madhya Pradesh State Minor Forest Produce (Trading and Development
Cooperative Federation) is a nonprofit organization overseeing a structure of cooperative unions
and primary cooperative societies that handle collection and storage of leaves. Cooperative societies
receive Rs518 per bag from the apex federation, of which Rs400 is paid to collectors. The
remaining Rs118 is used to offset society costs, 20 percent of which are for administration and
overhead. Since 1995 the federation has been returning 20 percent of its net income to societies,
which pay out the amount as a bonus to collectors after deducting administration expenses. In 2003
this payment was equivalent to Rs40 per standard bag. The federation also underwrites a life
insurance scheme for collectors, and it sets aside 20 percent of net income into a local forest
development fund and 30 percent into a fund for local infrastructural projects.

Six critical inefficiencies hamper the kendu marketing system in both states. First, the current
market system does not allow market forces to operate at all points along the value chain, where
quality would be rewarded with higher prices. Although JFM rules specify community member as
co-managers, for nationalized species such as kendu, sales must be made through state marketing
corporations; collectors are simply paid a wage per bag as pure price takers in a monopsony rather
than the revenue share specified in the JFM agreement. In Madhya Pradesh the bonus paid to
collectors at the society level can be differentiated based on quality, but the bonus is paid only the
next year after collection. Second, only very limited technical advisory services are available to
villagers on how to improve product quality and yield. Third, in some years a proportion of the crop

28
In some states kendu is also known as tendu.
29
In some insurgent areas, traders are asked to pay an additional surcharge per bag to collectors for high-
quality leaves. This charge can be as much as Rs175 per bag.

38
goes unsold by traders to bidi manufacturers due to poor quality. In 2003 an estimated 51 percent of
all kendu lots (about Rs170 million, or $3.8 million) in Jharkhand remained unsold by traders. The
problem also exists in Madhya Pradesh, on a smaller scale. Fourth, both the JSFDC and the Madhya
Pradesh Federation generate almost 100 percent of their total revenues through kendu marketing.
This narrow product line brings risks of collapse should markets decline due to changing social
perceptions about smoking and competition from prerolled tobacco cigarettes. Fifth, the current
system employs too many people. In Jharkhand the JSFDC employs 600700 staff throughout the
state for a work program of only a few months. In fiscal 2003 it generated net profits of only
Rs300,000 ($6,700), less than 1 percent return of sales revenue. In Madhya Pradesh at the union
and society level, a forest department range officer or forest guard is signatory to all bank accounts
and a member of the union/cooperative management committee. The current collection and
marketing system in the eastern tendu patta (or kendu) belt of the state deploys virtually all
department field staff during the six-week collection seasona questionable use of department
field staff. Recent changes in the tendering system will likely reduce direct involvement by
department staff, but even after these changes the structure leaves primary collectors with only a
passive role in the collection and marketing system and few direct incentives to improve product
quality. The market structure appears to be dominated by forest department staff with no clear plan
to further empower and ultimately let community producers manage their business affairs. Sixth,
village collectors often earn less than the daily wage rate. In Jharkhand an adult collector can earn
about Rs2,000 per season. 30 Surveys in communities suggest that the average net returns, after
allowing for time for collection and carrying the leaves to depots, ranges from Rs70 to Rs150 per
bag, or 1635 percent of the farmgate price.

Bamboo

Bamboo is a major forest product in Assam, where the annual harvest is estimated at 7.5
million green metric tons. Some 2.5 million households are engaged in producing bamboo,
providing 55 percent of the input for two government-owned pulp and paper mills. The mills
operate a complex collection and buying system for farmer-grown bamboo through private agents.
The pricing system is aimed at securing an adequate volume of bamboo to meet production targets
at the lowest weighted average cost. Cross-subsidization is used to purchase private bamboo; higher
cost supplies from more distant parts of the state are subsidized by growers closer to the mills. In
this case, a uniform price is a mechanism for rural income equity from bamboo. Based on actual
grower costs, including transport, and the average mill price, growers close to the mills are losing
Rs296 per metric ton (relative to what they would earn given open market prices) as a result of
cross-subsidized prices. Although new product and market opportunities are emerging, they are
proving difficult to exploit because of the high costs of piloting new products and market resistance
in India to bamboo substitutes for wood products such as paneling and flooring.

Medicinal Plants and Aromatic Oils

India has 16 agro-climatic zones, 45,000 different plant species, and 15,000 medicinal plants.
The domestic market for Indian systems of medicine and homoeopathy has been estimated at
about Rs40 billion ($890 million). There is also growing domestic and international demand for
natural products, including pharmaceuticals and other products with medicinal value, food
supplements, and cosmetics. According to ICS-UNIDO (2004), the international market of herbal
products is estimated at $62 billion. Indias share in the global export market for medicinal plants
is just 0.5 percent. Aromatic oils are another potentially important forest product, with expanding

30
The average person can collect 100200 small bundles a day, depending on the supply of the leaves (Prasad
and Bhatnagar 1990). Whole families are usually involved in leaf plucking; on average they can earn up to
Rs100 a day during the season. For a 20-day season, this represents about Rs2,000.

39
global markets and limited supply. The market structures for medicinal plants and aromatic oils in
most states of India are weak and focused largely on local trading. As unlisted species, medicinal
plants and aromatic oils have not historically received much attention from forest departments.
With growing market demand and high potential revenues, many states are considering developing
more state-controlled market systems for these products.

Of the three states examined, Madhya Pradesh has made the most progress in developing
better market systems for medicinal plants. The Madhya Pradesh State Minor Forest Produce
(Trading and Development) Cooperative Federation assists primary collection societies in selling
nonnationalized nontimber products by offering fixed purchasing rates for a small selection of
plants with market potential, including aonla, mahul patta, mahua seeds, and achar. Over time, both
collector prices and the range of nontimber products have gradually improved. The federation is
initiating a number of actions to enhance market access and incomes, including financing the
development of specific areas for nontimber production in 10 districts, facilitating commercial
financing for farmers to cultivate nontimber products, establishing local market outlets and
branding, promoting local value addition, and disseminating market intelligence to growers.

Assam has had success with patchouli, a perennial herbaceous plant of the Lamiaceae family. The
dry leaves of the species can be distilled to yield aromatic oil used in perfumes, medicine, and
processed food. Worldwide consumption of patchouli is about 2,000 metric tons a year. The largest
market is the United States, which consumes about 500 metric tons a year. In India consumption of
patchouli oil has reached 300 metric tons a year, 290 metric tons of which is imported. Indias
production level is less than 20 metric tons. 31 Once in production, one hectare of patchouli can
generate an average Rs44,000 a year in net revenue for three years.

A strong partnership between the state and the private sector has been developed to plan and
strategically develop patchouli production and marketing. The Northeastern Development Finance
Corporation (NEDFI) is financing start-up capital for small farmers to cultivate patchouli and
facilitating market linkages. NEDFI also has its own research facility. The AMJAL Group has
established local processing facilities. The forest department provides limited research on
silviculture, and a local community support organization works with farmers to build capacities.
Plans are underway for NEDFI to work with communities in nontimber forest products with high
market potential.

Fuelwood

Fuelwood is a source of livelihood for more than 11 million people in India, making it the largest
employer (formal and informal) in the Indian energy sector. An estimated 59 percent of rural
households obtain their wood from home-grown sources or free collection; only 21 percent pay for
all of their wood (Kholin and Ostwald 2001).

Markets are generally of two forms. One is a semi-commercial market through forest department
channels, in which forest department plantation or other larger-scale supplies (from farmers, for
example) are sold to large commercial buyers. In the second and more common approach,
individuals (usually women) from communities engage in small-scale fuelwood trading with other
households or middlemen for low returns. Data on trade volumes, prices, and general market
performance are not available at the state level. But forest department officials suggest that meeting
local fuelwood demands and improving livelihood opportunities is a critical issue that requires
innovative production and marketing solutions. The lack of organized community institutions,

31
Source: Background studies for Assam

40
particularly for women, means that collection and sales are left to individuals with little market
power when dealing with commercial collectors, who transport the wood to urban markets. There is
virtually no private sector investment in fuelwood plantations with communities as partners; for a
state like Assam, the need for investment is overwhelming. It is estimated that it will take up to 1
million hectares of fuelwood plantations in Assam alone to satisfy domestic demand and
completely eliminate the pressure on natural forests for fuelwood. Financing these investments,
incorporating plantations into a community forest model, and developing market solutions for
excess production are pressing needs.

Summary of Product Marketing

Market systems vary widely across the three states in terms of local empowerment and access
to efficient markets. One end of the spectrum is represented by the marketing of patchouli in
Assam, where the private sector leads marketing and the forest department serves as facilitator, not
interfering in market structures. The other end of the spectrum is represented by kendu leaf
marketing in Jharkhand, where villagers are little more than collectors operating as pure price takers
in a monopsony, with no bargaining position and no incentives to improve quality above minimum
standards. Significant welfare losses occur through the distorted pricing systems along the value
chain. The forest marketing corporation has high fixed and variable costs that require huge margins
to cover. This in turn limits the price that can be paid to collectors. Timber marketing of listed
species also falls into this lower end. Even in Madhya Pradesh, where the state auctioning system
sells high-quality teak to the private sector at internationally competitive prices, generating
significant state revenues, communities are still engaged in the production and marketing system
mainly as labor only. In between, a range of models are evolving. The kendu marketing system in
Madhya Pradesh uses a cooperative system and federation that provides more coordinated supply to
the private trading companies, facilitates some technical inputs from the forest department on
supply enhancement, and provides benefits, such as life insurance, to collectors. However, the
farmgate prices for collectors plus the federation profit share are no higher than what collectors
receive in the more restrictive Jharkhand model. There is no sign of increased market power from
the cooperatives reflected in higher incomes for collectors. In terms of social capital, the apex
federation, with its strong linkages to the forest department, makes all major decisions regarding
pricing and final sales to manufacturers. Communities are still largely insulated from market signals
that should influence quality and volume, and they are not yet fully empowered to manage the
financial affairs of the societies. Market distortions are also caused by a serious lack of awareness
and information on the market environment.

The marketing of nonlisted, nontimber forest products in Madhya Pradesh represents further
evolution. It is regarded as a good example in India of a government-oriented federation trying to
be a catalyst to develop local production and marketing of medicinal and aromatic plants through
planning, collecting, processing, packaging, and marketing initiatives. Policy questions arise,
though, about the forest departments long-term role with the federation and district unions. A
central issue to be addressed in all these cases is the appropriate role for the government in
marketing primary forest products from communities.

41
Benefit-Sharing from Community Forestry in India
Closely tied to marketing is the capture and distribution of forest revenues. Governments can
capture and distribute a share of initial resource revenues in a variety of ways, such as levying
various taxes, fees, and royalties on the resource or on the underlying forest land. Revenues can
also be captured further along the value chain as primary products are transformed and value added.
As an example, mature saw timber on government land could be harvested by a private contractor
or community under some form of license or permit in return for a royalty on every cubic meter cut
and hauled to the roadside. The royalty or any schedule permit fees would capture a portion of the
economic rent on the primary resource. The logs would then be sold to sawmills, which would
transform them to lumber and sell it to distributors or tertiary producers, such as furniture
manufacturers. Along the value chain, governments could assess various sales, value-added, and
income taxes or additional permit fees to generate further public revenues from the wood products.
Experience shows that a well-designed and effectively implemented forest fiscal system can be a
more progressive instrument to increase forest sector contributions to growth and development than
a narrow regulatory-based approach (Oksanen 2004).

Indias JFM program generates initial revenues through a benefit-sharing scheme. For listed
commercial timber species, the forest department handles harvesting and marketing and returns a
share of the net revenues to the community after deducting costs for production, marketing,
overhead, and other expenses. The forest departments also collect revenues from fines and rental of
guest houses. All revenues collected by the forest department are forwarded to the state government
treasury. State governments levy sales taxes on downstream processing, after logs are turned into
lumber by private sawmills, for example. Corporate income taxes are collected from forest
industries at the state and national levels.

The current system of benefit sharing is inefficient. The benefit-sharing scheme for primary
forest output from communities in India is highly regulated, has high transactions costs, and focuses
on a narrow range of revenue generation. Benefit-sharing schemes are promoted by forest
departments in every state as an incentive for communities to participate in the JFM program. In
some ways, the system is similar to a traditional calculation of stumpage. However, there are a
number of anomalies. First, the states do not try to derive stumpage estimates to charge the resource
user; the principal goal appears to be to try to recover operating costs and distribute part of any
surplus back to communities in return for assistance with forest management and rural
development. Second, costs used in deriving the net returns to communities are based on
administered forest department averages rather than actual costs by division or block, which would
normally vary by timber size, operating conditions, transport distances to the log yard, and other
factors. Third, costs are based on government production and marketing systems, which may be
more inefficient than comparable operations in the private sector. Fourth, subsistence products are
provided free of charge to communities without benefit-sharing (see appendix 10).

Benefit-sharing schemes need to be more consistent and transparent. Most states are gradually
increasing the share of net revenues from commercial forest production to communities over time,
but in the absence of a national policy, individual states apply different share ratios (table 6.1).
Field surveys indicate that many villagers are not clear on the actual sharing ratio or how the actual
revenue share is derived. The process for deriving net shares tends to be very complex and opaque.
Providing better and more transparent information to communities would allow villagers to judge
the merits of any benefit-sharing scheme. Communities are largely isolated from market signals in
the current benefit-sharing scheme and have few opportunities to gain experience or learn to market
their own products outside of government monopolies or state-led associations.

42
Evaluating benefit-sharing annually may not make sense. For major timber species, Assam and
Jharkhand pro rate the share of costs and revenues to communities annually. Madhya Pradesh
calculates net revenues to
communities on an Table 6.1. Benefit sharing Schemes in Assam, Jharkhand, and
aggregate district basis. Madhya Pradesh
These approaches may yield Community Share
questionable results, since State Subsistence Poles, Commercial Timber and
costs and revenues accrue Fuelwood, Bamboo Products
Nontimber Forest
over the entire rotation
Products
period rather than one year.
Assam Free access and 50% of net revenues for
If, for example a forest is consumption thinning revenues and 25% of
established on degraded net revenues from timber on
lands, the community and existing high forest to
the forest department both individual community
bear costs for several years 100% of net revenues for
until initial revenues begin second rotation to individual
to flow. Revenues from community
timber thinning and poles Jharkhand Free access and 90% of net revenues to
could take as long as 20 consumption individual community
years to start to flow, and Madhya Free access and Village Forest Protection
the final timber harvest Pradesh consumption Committee in degraded
could take 60 years or more. forests: 100% of net revenues
Evaluating benefit-sharing at district level shared by all
JFM communities in district
over one year ignores initial
Forest Protection Commitee
capital investments and in high forest: 80% of net
subsequent maintenance revenues at district level
costs. An alternative shared by all JFM
approach is to estimate the communities in district
present value and Source: Background studies
distribution of revenues and
costs over the full rotation. Using data from Assam, an analysis over one rotation shows that the
current benefit-sharing ratio used by the forest department for commercial timber and thinning is
not being attained. 32 Instead, communities reap a higher level of net benefits than the forest
department. The share of net benefits changes as forest management shifts from existing high forest
to the establishment of new forests on degraded areas. This analysis, based on rough data and
assumptions, suggests that a blanket benefit-sharing scheme, while conceptually simple, may not be
economically efficient or represent the wide range of forest conditions in a state.

Direct forest revenues captured by state forest departments are low. National data for 1999
2000 suggest that the average revenue-generating capacity of primary forest resources is low in
India (table 6.2). The data represent revenues collected by forest departments on behalf of state
governments; expenditures are state nonplan outlays. These figures reveal that direct revenues
collected by forest departments are not covering expenditures, which appears to be an implicit goal
of the current benefit-sharing model. Revenues are low mainly because of low average productivity
across all forests in each state, low commercial output from the forest outside of high-value
plantations, and the small proportion of forest output that is actually part of commercial benefit-
sharing programs (subsistence values of fuelwood and fodder are not included, for example). It also
reflects the low number of approved working plans in some states (such as Jharkhand), which limits

32
See appendix 11 for more details on the economic model and assumptions.

43
legal timber production. 33 If the analysis were done only for high- quality plantation forests, the
average revenue per hectare would be significantly higher. 34

Table 6.2. Mean Revenue and Expenditure in Selected States,

19992000 (Rs per hectare)
State Revenue Expenditure Net Revenue

Gujarat 150 1,570 -1,419

Jharkhand 69 847 -778
Goa 74 798 -724
Karnataka 243 777 -534
Tamil Nadu 465 866 -401
Assam 54 277 -222
Andhra Pradesh 133 307 -175
Jammu and Kashmir 224 386 -162
Rajasthan 70 208 -138
Kerala 1,009 1,137 -127
Manipur 4 127 -123
Madhya Pradesh 404 525 -121
Nagaland 19 127 -108
Arunachal Pradesh 30 59 -30
Meghalaya 65 72 -7
Orissa 164 160 4
All India 277 388 -111
Mean for states above 199 515 -317
Median for states above 103 347 -150
Source: MOEF (2001a); www.indiastat.com.; Forest Statistics of India.

It is important to emphasize that the negative net revenue figures in table 6.2 are neither good nor
bad: they depend on each states policy goals for revenue generation by forest departments. These
policies are not clear. They could encourage forest departments to be revenue neutral (zero net
revenue), to maximize direct revenues through higher charges against primary production, or to
charge communities no fees or royalties in order to encourage local development and recognize the
role played in conservation of timber and nontimber forest values.

33
This issue reflects the poor capacity in many states to produce working plans for all districts in a timely
manner based on solid inventory and growth and yield information that is subsequently approved by the
Ministry of Environment and Forests.
34
The analysis also omits revenues captured by state forest marketing corporations/federations that operate
outside the forest departments.

44
7. Unlocking Opportunities for Forest-Dependent People: Policy
and Program Options

Introduction

A central thrust of the governments strategy for meeting forest conservation goals has been the
adoption of the JFM model of partnerships with communities. The program has had a positive
impact on increasing national forest cover and improving the ability of many forest communities to
meet their subsistence requirements, but the direction and scope of reform is uneven across states.
Furthermore, this evolution is not keeping pace with the challenges posed by a domestic and global
environment that is rapidly changing, both. India is enjoying high rates of economic growth,
increasing industrialization, and shifts in agriculture to a more market-driven model. The rural
nonfarm sector, which includes forestry, has great potential for economic growth, employment, and
improved livelihoods. But encroachment, unsustainable grazing and fuelwood collection, fires, and
shifting cultivation are contributing to serious timber and fuelwood deficits.

States with high levels of forest cover tend have large populations of forest dwellers, including
tribal people, many of whom are among the poorest groups in society. Forest-based
communities tend to rely on marginal agriculture systems and wage labor as the primary source of
livelihood. Forest resources contribute to livelihoods mainly as a safety net during lean times. They
also provide a seasonal source of income through the collection of subsistence fuelwood, fodder,
and other nontimber products, such as medicinal plants, fruits, and flowers. Forests are not a major
contributor to cash livelihoods in most of these communities, but the potential exists to increase
commercial forest-based activities as one step along the pathway out of poverty, going beyond
subsistence and seasonal production.

Many mature natural forests already have high market and nonmarket values. Degraded
forests, which tend to be allocated to communities through JFM, have the potential to generate
higher values as their productivity increases. But turning these potential values into measurable
livelihood improvements will require further evolution of the JFM model along the community
forestry continuum. 35

Options for Reform

A suite of policy and program reforms has been identified for consideration by the
government in addressing four critical enabling factors under the broader development goals of
improving natural, physical, social, human, and financial capital in communities (box 7.1). Forest
sector reforms around these enabling factors require a gradual transformation in which communities
are more empowered and both willing and capable of capturing the potential livelihood
opportunities from forests.

35
See appendix 12 for more information on the community forestry continuum and how forests can be a
better pathway out of poverty for communities.

45
 Box 7.1. Critical enabling Conditions to Unlock Forest Values for Forest-Dependent People

To support continued evolution of JFM into a model of community forestry where people are more empowered
and livelihoods improved in concert with forest productivity, four key enabling conditions need to be met:
1. Secure forest resource tenure and management rights for communities
Operate within the space provided by existing legal frameworks.
Respect historic tribal rights over forest resources.
Where historic rights do not exist, provide communities with stronger resource tenure.
Provide communities that are willing and able the opportunity and incentives to assume greater responsibility for
sustainable forest management, in both degraded and good-quality forests.

2. Provide robust support systems for forest management regulation, monitoring, and control
Provide communities, forest management agencies, and the public with accurate and cost-effective baseline and change
data on forest resources and livelihood changes.
Develop silviculture systems based on robust growth and yield data that support effective management of key timber and
nontimber species by communities and forest departments.
Establish computer-based mapping systems to underpin forest management planning requirements at the community,
division, and state levels.
Create a computer-based information management system to support management planning, forest policy, and reporting.
Establish a participatory micro-planning system that addresses the broader rural development needs of forest fringe
communities.
Make investments that improve forest productivity.

3. Increase access to more efficient markets

Establish marketing systems based on open and direct community and private sector participation.
Provide fair returns to communities for commodity and specialized timber and nontimber forest products.
Generate higher revenues to communities and government for forest management and local livelihoods.

4. Establish effective and flexible institutional models

Adopt models that reflect the reality of limited state resources and the growing numbers of communities participating in
forestry programs.
Adopt models that position forest departments as key partners to communities, with sharper focus on strong technical
advisory, facilitation, and monitoring functions rather than on ineffectively addressing a wide mandate in a command and
control environment.
Ensure that models recognize tribal communities unique cultural links with the forest and traditional institutional
structures.
Integrate models with the evolving local authority and other relevant institutional structures.

Source: Adapted from Molnar, Scherr, and Khare (2004).

Reforms will require significant increases in public investment, primarily to build institutional
capacities and structures, in both communities and in public forest agencies with a more focused
mission. Increased investments to improve forest productivity are also necessary. Although a
number of progressive national and state policies and guidelines have been developed in the past
two decades, implementation has been weak and uneven across states. The fundamental challenge
is to move from a JFM model in which communities are helping the forest department implement
important public conservation goals to a model in which forest departments and other stakeholders
help communities achieve their own development goals, subject to rational conservation safeguards.
Conservation and improved forest livelihoods are not mutually exclusive goals.

46
STRENGTHENING THE FOREST RESOURCE TENURE AND MANAGEMENT RIGHTS
OF COMMUNITIES

National legal reforms should be guided by the National Forest Commission report. The legal
and policy issues surrounding forestry and interactions with communities are not new. 36 One of the
greatest challenges is supporting the 1988 National Forest Policy with a more efficient legal
framework for implementation. The main enabling legislation, the Indian Forest Act of 1927 and
the Forest Conservation Act of 1980, is not in full concordance with the 1988 National Forest
Policy or subsequent initiatives,
such as JFM. A myriad of Box 7.2. Terms of Reference for National Forest Commission
smaller legal and policy issues
arise at the state and even The then Prime Minister, Shri Atal Bihari Vajpayee, on 21st
community level from national January 2002 recommended that a Forest Commission be set up to
policy and legal incongruities. look into restructuring, reform and strengthening of the entire forest
Recognizing the magnitude of setup and affiliated institutions in the country. The terms of
these legal and policy reference for the Commission are:
1. Review and assess the existing policy and legal framework and
challenges, in 2003 Ministry of
its impact in a holistic manner from a ecological, scientific,
Environment and Forests economic, social, and cultural viewpoint.
constituted a National Forest 2. Examine the current status of forest administration and forestry
Commission to address a fairly institutions at the national and state levels to meet the emerging
broad term of reference (box needs of civil society.
7.2). The National Forest 3. Make policy recommendations for achieving sustainable forest
Commission has sought input and wildlife management and development, biodiversity
from a wide range of conservation, and ecological security.
stakeholders. Recommendations 4. Suggest ways and means to make forest administration more
in the draft report, expected in effective, with a view to achieving the above policy options.
5. Establish meaningful partnerships and interfaces between
early 2006, should help set a
forestry management and local communities, including tribal
much needed national vision on people.
forestry and guide national legal Source: MOEF 2003
and policy reforms.

Individual states need to examine practical options for legal and policy reform. In some cases
this may mean amending existing law. In others it may mean drafting a new Forest Act that
consolidates various acts and amendments into a single piece of law, incorporating needed reforms.
Legal reform must also be supported by a more effective regulatory framework for field
implementation. Regardless of the approach selected by state governments, a number of key
priorities should be addressed to help communities unlock increased livelihood opportunities from
the forest while continuing to provide for effective forest conservation.

State policymakers need to review and strengthen state forest policies. States need to strengthen
their forest policies, using a participatory process that allows for broad public input. State forest
policies should reflect national policy goals, be better integrated with other state policies (such as
industrial development and tribal development), and incorporate local goals and objectives
expressed by a range of stakeholders, including government technical specialists, forest dwellers,
tribal groups, and community support organizations. A revised policy must also acknowledge
historical tenure-based forest resource rights. The 2004 Assam Forest Policy is a good model to
examine. It is progressive, innovative, and based on a reasonable level of public input. The recent
visioning work conducted in Orissa with assistance from the Department for International
36
See, for example, Khan and Pillai (2001), Upadhyay and Upadhyay (2002), and Bahuguna and others
(2004).

47
Development (DFID) is another positive approach worth replicating that can feed into new state
forest policies.

Stronger forest resource rights for communities need to be established. Globally, more than
100 million indigenous people live near forests, yet most do not enjoy secure access to natural
resources or recognition of historic rights to use these resources. The global situation is changing
rapidly, as governments recognize the forest sustainability and livelihood benefits of providing
stronger resource rights to communities. Over the next decade, the area of global forest under actual
community ownership is forecast to double to nearly 500 million hectares. The area of forest being
administered by communities on behalf of government is forecast to double to 260 million hectares
(Molnar 2004). In India state governments have devolved limited management responsibilities and
modest usufruct rights to communities through JFM, but they have not appreciably strengthened
security of tenure over resources. Without more secure and efficient tenure over natural resources
such as forests, communities lack incentives to invest in long-term management and have little
recourse to fight powerful interests from exploiting these resources (Ellsworth and White 2004). As
Molnar, Scherr, and Khare (2004) note, secure tenure and resource access rights are crucial for the
success of community-level conservation initiatives.

New approaches in three broad areas need to be considered for tenure arrangements with forest
dwellers in India:
Tenure arrangement where historic forest resource rights already exist. Various historic
forest rights exist, especially in tribal areas. Some of these rights may be acknowledged in old
legislation that has been eroded over time or is not recognized in practice. These historic rights
should be reviewed, acknowledged where justified, and codified in current law.37 Any moves to
legally acknowledge historic forest rights should be linked with ongoing land policy reform in
India and new legislative developments, such as the proposed Scheduled Tribes (Recognition of
Forest Rights) Bill. 38

Tenure arrangements where no historic forest resource rights exist. While clear,
inheritable, and transferable title to forest land may be a desirable long-term economic and
policy goal, as an interim measure resource rights could be significantly strengthened without
directly addressing land title. A number of countries enhance resource rights without granting
land ownership (table 7.1). One option for India would be to specify a fixed-term lease during
which the community would have rights and responsibilities over the assigned forest. 39 This
approach is being used in China for individual households for periods up to 99 years for
commercial production (Xu 2004). Such long-term leases are a step forward, but they create
uncertainty over tenure as the termination date nears, and they limit options for sanctions if
forest management performance is poor. At the other extreme, short-term leases of a few years
offer little incentive for the tenure holder to invest in sustainable practices. A third option, used
in a number of countries, including Canada, is a 20- to 25-year management agreement for a
specified area of public forests, renewable in regular, periodic increments (for example, every
five years) based on the community meeting clear performance standards for forest

37
Where villagers do not demonstrate good land and resource management practices, a case could also be
made to extinguish these rights (N.C. Saxena, former head of Planning Commission, personal
communication, 2005).
38
The proposed bill seeks to address historic land rights held by a number of tribals in forest areas. It is
designed to allocate 2.5 hectares per family through a long-term lease arrangement with legal backing.
39
For example, a period of 1030 years could represent the time period during which various forest trees
could mature into commercial products. With faster growing species and small poles, the period could be 10
years; for slower growing species and larger poles, the period might be closer to 30 years.

48
 management. 40 Tenure holders gain secure resource use rights, while the state retains land
ownership. 41 Forest officers or independent forest consultants can compare performance against
management standards. If performance is satisfactory, the contractual agreement is extended
five years, so that the community always has a renewable 20- to 25-year planning horizon and
security of specified rights over the assigned forest resources. Failure to meet specified
performance standards could constitute just cause to remove the forest rights or, in less serious
cases, require closer supervision and control by forest department or other designated agents for
a defined period. This approach is similar to community forestry in Nepal, where forest user
group are established as autonomous and corporate bodies with legal and statutory perpetual
rights to develop, conserve, use, and manage the forest and to sell all forest products
independently of the state (Subedi 2002; Centre for Civil Society 2003).

Table 7.1. Forest Rights Regimes Without Land Title in Selected Countries

Country Community Tenure Description

China Long-term contracts for 30100 years are issued to farmers
on former collective land; tenure is transferable, and it can be
inherited and used as collateral for loans.
Ethiopia Groups of 200-400 farming families can organize into
peasant associations with clear usufruct rights for up to 10
hectares per family. The peasant association is responsible
for soil, water, and forest conservation.
Honduras Communities can become legally registered cooperatives and
enter into a contractual agreement with government that
assigns management and production rights to the forest.
Senegal New forest code transfers responsibility for forest
management and exploitation to communities, but ownership
of land remains with state.
Tanzania Village council becomes land manager for allocated
nonreserved forest land (forest, farmland, commons), held
under collective title by the village in perpetuity. Villages
can become co-managers of reserved forest land through a
legal joint management agreement.

Applying this approach for community-based forests in India would require amendments to the
Forest Conservation Act of 1980. For scheduled and autonomous district council areas (as in
Assam) and communities holding historic land or resource rights, similar performance
standards could be used to guide communities and local authorities in sound forest
management. The use of these forest resources and tenures as collateral for loans needs to be
investigated, possibly through a task force comprising the Ministry of Environment and Forests,
the Ministry of Finance, commercial banks, and state lending agencies, such as the National
Bank for Agriculture and Rural Development. Countering these alternative approaches is the
reality that in many JFM forests, traditional use rightsfor grazing, for examplemay be held

40
Criteria could include no net loss of forest area (or increases in the area under forest cover), specified levels
of loss of forest-growing stock from fire of human origins, number of fires per year, verified harvesting of
forest products within 510 percent of the maximum sustainable levels identified in the management plan for
major species, and adherence to silviculture prescriptions agreed to in the micro-plans.
41
One constraint might be Indian culture, which does not distinguish between land and resource tenure. This
is one reason the tree patta scheme was not as successful as planned.

49
 by people located in distant villages. Strengthening the tenure rights of one local village
(through a community users group) and restricting access by other villages (to avoid market
failure through open access issues) could easily lead to intervillage conflict. One way of
addressing this issue is by following examples from West Bengal, where communities holding
rights to the local forest resource negotiate resource access and user fees with more distant
villagers, often with the assistance of local panchayat leaders.

Tenure rights for nomadic tribal people. A third, and likely minor, case is that of nomadic
tribal people living in remote forest areas as low-impact hunter-gatherers. As a starting point,
governments, assisted by tribal leaders, could identify the nomadic tribes and areas within the
forest estate. Governments then need to determine if there is sufficient unencumbered forest in
these areas to demarcate a form of protected forest for nomadic tribal people.

Options for tenure reform need to be seriously considered. A continuum of options exists for
strengthening resource tenure for community forestry, depending on the particular context, presence
or absence of historic land or resource rights, nature and strength of community institutions,
broader land policy reforms, and political will. New tenure regimes must respect forest rights and
use a transparent process for decision making on alternative land uses that lead to loss of forest
livelihoods, such as mining. Land and resource rights are a complex and politically charged issue
that requires extensive national debate and political will to address. State governments may
consider establishing a high-level forest rights review body, chaired by the chief minister office,
with appropriate representation from line ministries, communities, and tribal groups living in areas
where historic forest exist are known to exist. Tenure reform, while a critical element of broader
legal and policy reform is only one of four enabling factors to improve forest livelihoods through
community forestry. On its own, it cannot improve forest livelihoods and rural development.

Communities holding either acknowledged land rights or proposed renewable use agreements need
to be fairly compensated when their forest livelihoods are affected by changes in land use, such as
mining. Discussions currently taking place in Orissa, in which the owners of firms engaged in new
land use activities would issue nonvoting shares to community members as compensation in
addition to resettlement and rehabilitation entitlements, offer promise. These steps would likely
reduce the number of issues escalating to the courts, which take an inordinate amount of forest
department staff time.

The registration process for communities needs to be reformed. Although the Ministry of
Environment and Forests has issued a policy directive on this issue, implementation has been slow
in most states. Registration of communities under proposed renewable tenure must be a legal
process. This process could be handled under the Indian Registration Act, the Societies Registration
Act, the Cooperative Society Act as a subcommittee of local authorities, the trust acts, or
amendment to the Indian Forest Act of 1927. The Mutually Aided Cooperative Societies Act in
Andhra Pradesh may also provide a good model. Another option could be modeled from Assam,
where communities are grouped under the FDA and registered together through the Societies
Registration Act. There are similarities between the Assam model and watershed programs, where
groups of communities establish a registered society with a common bank account (to receive
project funds) and facilitate landscape level planning. It is important that whichever act is used, the
field officer signing on behalf of the government (forest department) has the legal right to do so.

50
Processes need to be established for strengthening community resource tenure. Recognizing
historic and legitimate resource rights for specified forest communities and improving security of
tenure for communities without historic rights can be a lengthy and sensitive process. Global
experience suggests actions to support these processes (box 7.3). Brazil has made good progress
settling legitimate land claims of
indigenous forest peoples. In 1988 Box 7.3. Opportunities to Advance Community
constitutional changes recognized the Tenure Security
historic rights of many tribes in the
forest interior. By 2001 more than half Community tenure can be secured in a variety of ways:
the land claims had been settled, supporting anti-corruption and justice reform
mostly in the Amazon basis. These supporting tenure mapping and legal process
claims accounted for 12 percent of the convening stakeholders to discuss specific tenure issues
countrys landmass (Ellsworth and supporting emerging community leaders and organizations
White 2004). The government of India building successful field models of improved tenure
can encourage these processes and mobilizing civil society through networks
opportunities at the national and state creating a global learning network including field visits
level as separate policy initiatives or supporting federations and marketing associations.
link them to ongoing activities, such
Source: Ellsworth and White (2004).
as land policy reform and land
recording.

Mapping forest and land tenure is

critical. Historic and new tenures Box 7.4. Mapping customary land tenure in Canada and
Indonesia
must be recorded and mapped (box
7.4). Much of the fieldwork, initial Canada and Indonesia have use community mapping for
digitizing, and mapping could be many years. With the assistance of NGOs, rapid appraisal
contracted to a neutral third party methods are applied to develop field maps with indigenous
from the private sector to provide tribes. The map is then used as a basis for negotiating tenure
objective, impartial, and cost-effective rights with the government. The accuracy of the mapping
services. The model used by Assams process can be improved with GPS-GIS technology. The
forest department for contracting out community participates fully in this process, which may be
basic GIS services has merit and could conducted by a neutral third party, such as a community
be applied in other states. Forest support organization or research institute.
tenure mapping would increase clarity
Source: Ellsworth and White (2004)
over boundaries between forest area
and revenue area records. Both the forest and revenue departments would need to be involved in
new tenure and mapping programs, using readily available local technology and expertise.

The linkages between state forest legal frameworks, community-based forestry, and
panchayats need to be strengthened. Some states have made efforts to modify JFM to account for
PESA legal requirements. But the reality in the field suggests that implementation is weak, due to a
number of contradictions with the existing forestry legal framework. In watershed or community-
driven development projects throughout India, village user group committees (similar to JFM
committees) are registered as subcommittees of the panchayat. But although these solutions may
provide a veneer of concordance, PESA will not be fully implemented until the broader forestry
legal and regulatory framework is reformed. Even with these legal reforms, local authorities would
require significant investments to build capacity for administration and finance and to strengthen
knowledge and understanding of forest management and marketing with communities. A national
review should be considered to better understand the issues and opportunities surrounding
decentralization, PESA, and forestry legal and regulatory frameworks for scheduled areas; identify

51
a roadmap for reforms; and develop a program for appropriate capacity building and education in
local authorities, communities, and relevant line agencies.

The harvesting and transit permit regime for forest products needs to be reformed. Although
some states have made progress in relaxing these rules, further reforms are needed. A detailed
review of all state harvesting and transit permit regimes should be considered as a precursor to
national policy and legislative reform of this issue. It is important not only to relax these restrictions
but to eliminate the wide regulatory variation between states. As part of a national reform process,
state governments could consider input by an independent panel of stakeholders, including forest
departments, private forest farmers, community forest committee members, local sawmill owners,
nontimber forest product buyers, local development banks, and interested community support
organizations. Consultants with forest regulatory experience could be contracted to work with the
Ministry of Environment and Forests to develop a new system that provides a mechanism for
monitoring product flows from farms and communities, while at the same time reducing needless
delays and transactions costs. A recent study in 18 countries, including India, suggests that there is
usually a major gap between regulations and the governments capacity to effectively deliver
service (Contreras-Hermosilla 2004). Command and control systems tend to reduce democratic
participation and create an environment that is conducive to corruption. The 2004 study
recommends that governments relax the command and control regulatory system and allow
incentives, participation, and market forces to regulate forest management. Coupled with broader
market and tenure changes, these reforms would offer stronger incentives for communities and
farmers to invest in forests.

Education, information, and awareness need to be improved. It is imperative that communities

have access to all relevant legal documents in local languages and a clear sense of their legal rights
over the resource. Beginning with the existing JFM model, at a minimum each community should
have copies of the resolution, the Memorandum of Understanding, and the micro-plan. This is being
done in some states but on a very limited basis, due to financial constraints. Field research reveals
that many officers in state forest departments lack an understanding of the legal and policy
framework for forestry and the broader penal code. New programs are needed to provide legal
education and increase awareness of officers at various levels, from basic rules and procedures for
forest guards to more complex training for senior managers. Lack of legal knowledge means that
forest officers do not know what is allowed under existing law. This prevents them from testing
creative solutions for fear of operating outside the law. Police and state judiciary would benefit
from sensitization on specific forestry legal and policy issues. As tenure structures with
communities are gradually reformed, stakeholders will need updated information in local languages
on their new rights and responsibilities over forest management and marketing.

Legal and policy reform will need significant financial and technical support. All three states
reviewed are contemplating legal amendments. The draft proposals examined represent positive
thinking and a move toward greater forest rights for forest-based communities, especially tribal
people. But these developments are hindered by a lack of agreement on important legal questions,
particularly with respect to addressing historical land and forest rights systems, providing a stronger
legal basis for community-based forest management, strengthening community resource use and
marketing rights under PESA, and dealing with more efficient transit of forest products. Although
recent draft legal reforms are to be commended, more comprehensive reforms and capacity building
are still needed. These will require time, significant financial resources, technical inputs (national
and international), further research, and appropriate public input.

52
STRENGTHENING SUPPORT SYSTEMS FOR IMPROVED FOREST MANAGEMENT,
MONITORING, AND CONTROL

To facilitate the gradual transfer of rights and responsibilities over forest management to interested
communities, a number of reforms are needed in underlying forest management, monitoring, and
control systems. These include strengthening resource management and planning approaches,
developing better mapping systems, upgrading inventory systems, and refocusing R&D to better
match species and products that are important to communities.

A comprehensive forest sector strategy needs to be developed. At the national level, the
Ministry of Environment and Forests could consider developing a national forest sector strategy
that outlines a common vision for forest development, including community forestry, building on
the National Forest Action Plan and the National Forest Commissions forthcoming report to
Parliament, which was based on extensive public input. As part of strategy development, a
comprehensive review of supply and demand for major forest products is needed, including timber
and fuelwood, long-term trends relative to forest sustainability, pricing patterns, and spatial
analysis. This review would clarify questions about long-term forest health, particularly for
fuelwood, and provide guidance for investment programs. In addition, it would be useful for the
Ministry of Environment and Forests and other land-based ministries, such as the Ministry of
Agriculture, to undertake a preliminary national land assessment to identify lands best suited to
forestry, agriculture, and conservation.

This information would help states develop forest sector strategies by identifying land classes best
suited for forest production. The three states reviewed have a forest strategy or vision document
that sets out a framework for forest sector development. But much more work is needed to
transform these documents into comprehensive forest sector strategies, particularly for community
forestry and rural livelihoods. Better information is needed on supply and demand forecasts for key
forest products, secondary processing capacity and market demand, pressures on the forest, rural
livelihood issues, and economic analyses of policy options. Input from other rural development
agencies and civil society would broaden the scope of analysis and increase plan relevance.
Developing these strategies will require significant investments in information and analyses that
most forest departments currently lack. Recent work by DFID with the government of Orissa and
the state forest department offers a good example of developing a common vision and
comprehensive forest sector strategy.

Working plans need to become more strategic and flexible. The working plan and its 10-year
cycle are generally appropriate for the current planning model at the divisional level, but over time
these plans should shift to a more strategic focus that will provide a stronger foundation for
community-level forest planning. As more forest in each division is allocated to communities
through evolving models of forest tenure, 42 the concept of a top-down working plan as the basis for
controlling decisions in these forests becomes less relevant. Outside of state plantations, forest
management at the division level would be implemented increasingly by individual micro-plans
meeting specified standards for forest sustainability. Working plans could evolve into a broader
strategic document to guide, rather than control, field-level management in community forests.

A balance is needed between the states responsibility to ensure overall forest sustainability and
allowing communities to make rational decisions about managing forest lands, including
conservation. As an example, in steep areas with fragile soils, the state has a responsibility to ensure
that community forest practices maintain vegetative cover for conservation values and reduce

42
As an example, Jharkhand plans to eventually have all its forest under co-management

53
negative externalities by management guidelines that either exclude harvesting or limit it to
selective felling for example. In other areas, people may want to manage their forests for multiple
returns and set aside areas for conservation, which has important and positive biodiversity and
watershed implications. This could eventually bring significant conservation benefits for
community forests near protected areas. In the longer term, protected area boundaries or zoning
could be redefined based on the inclusion of conservation areas under community management.
This new working plan approach requires improved division-level forest resource information from
a combination of remote sensing data (from the Forest Survey of India) and more intensive field
surveys from micro-plan inventories that extend beyond traditional timber species.

Better information is also needed on communities, rural development priorities, biodiversity values,
and options for forest management to meet local needs. Socioeconomic information is available
through the national census (to the village level), other state departments, and local community
support organizations. Improved information is also needed on how resource supply meets
subsistence and market demand and how supply could be modified through appropriate
management inputs to meet future requirements. More economic analysis is required on silviculture
and forest management strategies to inform micro-planning and implementation. It is also
recommended that state forest departments consider a public consultation process for more strategic
working plans, possibly through the FDA structure. A balance is required, however, between
completing the division-level plans within a reasonable time frame and allowing interested parties
an opportunity to contribute input.

The integration of working plans and micro-plans needs to be improved during a transition
phase. The challenge facing forest managers and policymakers is dealing with the transition phase,
as community-managed forests gradually cover increasing areas of divisional forests. New working
plans would benefit from a more complete summary of key inventory data derived from community
forest micro-plans and linked to key forest cover types in the division. A spatial overview could be
provided with a map showing the location of all community forestry operations in the division (by
block), overlaid on the block or division-level forest cover maps. An agreement between state forest
departments and the Ministry of Environment and Forests may be needed that new micro-plans
prepared after the working plan is already approved can proceed with implementation as long as
they fit within the broad goals and objectives of the working plan. A short report could be sent to
the Ministry of Environment and Forests each year listing the new micro-plans and providing a
summary of key data for information and filing purposes. This kind of approach is imperative to
avoid having the Ministry of Environment and Forests review hundreds of new micro-plans each
year. It would also put more responsibility for management plan review and approval at the state
level, where it logically belongs. Where community forestry covers most of the forest area in some
divisions, working plans could be converted into more a strategic planning and summary
documents as they are revised after 10 years.

Micro-planning should be guided by an operational manual. An operational manual is needed

to guide all parties in community-based forestry. Good examples from other sectors are found in the
District Poverty Initiatives Project in several states, the Karnataka Watershed Development Project,
and the India EcoDevelopment Project. The operational manual covers a range of steps to build
social capital and an integrated plan for livelihood improvement (box 7.5). 43 It is important that the
manual reflect a planning process that is sustainable once donor funding ends. The end goal of the
process should be creation of a simple micro-plan that addresses broader rural development and
livelihood activities beyond forestry, such as livestock, grazing, energy, agro-forestry, fish ponds,
and agriculture intensification. The operational manual should present criteria and processes for

43
Madhya Pradesh recently developed an operational manual for JFM. Policymakers could build on this
manual and on examples from watershed programs.

54
developing a local forest management plan to a minimum standard, including resource inventory
measurement, definitions, and sampling intensities for timber and key nontimber forest products;
common silviculture systems and treatments based on best practices to manage sustainable flows of
products desired by communities for subsistence and commercial sales; simple models and methods
for sustainable harvesting regimes for key species; and methods for monitoring and reporting. The
Ministry of Environment
and Forests should Box 7.5. Social and Institutional Elements of an
actively participate in the Operational Manual
development of forest A good operational manual for social and institutional development
management plan criteria would provide guidance on a number of important steps:
with each state in order to Contact community to raise awareness.
Assess current institutional structures.
achieve consistency.
Help establish a resource users committee and executive with wide
Other rural development
representation across community groups and gender that accounts for
agencies and experienced traditional community institutions.
community support Create self-help groups for future income-generating activities.
organizations also have a Provide training in key areas, such as running effective meetings,
role to play in compiling bookkeeping, decisionmaking, and gender.
operating manuals. The Sign an agreement to register and participate.
plan criteria and operating Identify development needs and gather baseline natural resource
manual should be inventory and socioeconomic information through processes such as
available in local village mapping and participatory rapid appraisal.
languages, and simplified Develop a micro-plan that addresses broader livelihood needs on all
versions should be lands in the community area.
available to all
community members. Source: Background studies

In some areas forest communities could be consolidated. Many watershed development projects
in India are consolidating communities in order to facilitate planning on a broader landscape or
watershed basis. A
consolidated approach Box 7.6. Why Consolidate Forest Committees?
could have a number of
Consolidating forest committees could serve several purposes:
advantages with respect to
It is more economical to produce field maps at a scale smaller than
forest planning and 1:20,000, and smaller scale maps allow all land uses to be identified
conservation (box 7.6). Development issues common to all villages, including road upgrading,
Specific forest manageme health and education, service delivery of agriculture and forestry
nt needs and interventions extension, and minor irrigation, could be addressed in a more efficient,
and broader rural coordinated, and economic manner.
development activities for Dealing with common forestry problems would be easier.
each community would be Development of marketing cooperatives or federations could be
identified through the promoted, based on economies of scale for product sales and improved
micro-planning process; market positions.
these could then be Training of communities would be facilitated by covering a larger but
combined into a single similar group.
consolidated plan for as Landscape-level forest planning would be supported that addresses
conservation and economic goals.
many as four or five
Scope would be provided for zoning community forests into areas
communities. Each
conducive for timber and pole production, nontimber forest products,
community would still grazing and biodiversity conservation (with limited access).
implement an annual Source: Background studies
work plan. This approach

55
may be well suited to many tribal groups, which already have village clusters as part of their
traditional institutional structures. But it is important to let communities themselves determine if
they want to cluster, how doing so would work, and what structures should be used.

Silviculture systems need to be reviewed and revised to meet local needs. Further shifting the
focus of forest management away from commercial high-forest plantations and clear-felling of
traditional timber species such as sal and teak toward multiple-use forest management by
communities will require commensurate changes in silviculture practices. Where communities are
managing forest types dominated by teak and sal, silviculture systems need to support selective
felling regimes through uneven-aged management for subsistence production. Where market
potential exists, this approach should also support commercial timber production that also allows
intermediate products, such as fodder, nontimber forest products, nontraditional tree species, and
fuelwood from branches, litter and shrubs, to be sustained. This approach requires better knowledge
and understanding of relationships between crown closure and nontimber forest product production
in the understory. For degraded lands, economic analyses suggest silviculture regimes favoring the
management of natural regeneration rather than plantations. Information is therefore needed on
appropriate silviculture practices that will develop these natural forests into an architecture that
yields multiple products, including timber, fuelwood, fodder, and trees, such as neem, mahua, and
arjun, that provide nontimber forest products.

Agro-forestry also offers potential short- and intermediate-term economic returns. Mixing lower
value subsistence agricultural crops, such as paddy rice, with higher income horticulture, poles, or
nontimber forest product trees planted along field boundaries or through intercropping could
increase average annual net revenues per hectare from Rs6,000 to Rs15,000 or more after 10 years
(Pandey 2003). With agro-forestry, farmers continue to partially satisfy household nutrition
requirements from subsistence rice production. Pressure is also reduced on neighboring forests for
domestic fuelwood and poles. Agro-forestry is not suited for everyone; farmers with very small
holdings will be hard pressed to give up valuable food production land for tree crops that take
several years to mature. Rather than a simple either/or approach, efforts to improve agricultural
livelihoods of small-scale farmers should provide higher crop yields and increase confidence in
investing in trees for part of their holdings. Expanded agro-forestry will require capacity building
and better coordination between forest departments and the Department of Agriculture.

Forestry research needs to focus more on community livelihood requirements and agro-
forestry for small farmers. Applied R&D is critical to support further transitions of JFM in India
and ensure that community forests achieve higher productivity in a range of species. Although some
states, such as Andhra Pradesh and Madhya Pradesh, are gradually reorienting R&D to
nontraditional timber and nontimber forest product species, in general the linkages between
scientific research, development and dissemination, and uptake by communities are weak across
India (Khan and Pillai 2002). These results are consistent with those of Hedge (2000), who finds
poor linkages between forest research and extension agencies, limited resources allocated to forest
research, and weak technical support. The Indian Council of Forest Research and Education
(ICFRE), the Ministry of Environment and Forests, and state forest departments should consider
developing a new national strategic plan for R&D that is more focused on community-based
forestry. It should propose options for rationalizing limited R&D capacity around key priorities
related to silviculture, growth and yield, harvesting and marketing in community forests and small
farmers, and the identification of institutional partners that can assume lead responsibilities on
specific topics. It should also identify opportunities for increased private sector involvement in
R&D to ensure a more market-driven planning framework for appropriate species. The plan needs
to examine new approaches for disseminating research findings to both communities and state
forest managers in the field. It should also include a research agenda that can capture community

56
knowledge about improving the growth and yield of selected nontimber forest products. The new
concept of establishing village ethno-botanists, as in Andhra Pradesh, is worth exploring in more
detail.

Resource assessment and monitoring systems need to be improved. The underlying forest
resource assessment and monitoring system must be significantly strengthened to support further
evolution of JFM and enhance the ability of state forest departments to monitor overall forest
stewardship. A more effective resource assessment and monitoring system could be based on six
pillars:
o Let communities assume greater responsibility for basic forest inventory. Communities
could use simple inventory
methods (box 7.7), the Box 7.7. Options for Conducting a Community Forest
basics of which can be Inventory
learned in a few days.
These methods would A timber inventory could be conducted by laying out square inventory
plots of a 0.25 hectares in random locations and tallying the trees on it by
provide better information
diameter class and species. The inventory crew would measure diameter at
than the approach currently breast height. On a subplot (25100 square meters), the seedlings and
used by forest departments. saplings could be counted. The crew needs to be able to recognize the
As experience is gained, various species with some degree of reliability.
some communities could
Another method is to use circular plots, marked by drawing a circle from a
eventually incorporate center point with a short rope. A 15 percent area might be sufficient for
portable GPS units to geo- baseline and regular stock monitoring. The only equipment needed by the
reference cover types in community would be a 50-meter measuring tape; a diameter tape;
order to provide better increment calipers borer (to measure tree age) or tree fork to measure tree
girth; a simple hand compass, preferably with a clinometer (to estimate tree
spatial information, linked
height); a clipboard; pencils and paper; and perhaps preprinted tally
to the broader division-level forms. The cost of this equipment would be less than $100.
and then state-level
resource inventory. Source: Background studies
Community-oriented
inventory processes need to
o be extended to Figure 7.1. GIS Mapping to Support Village Land-use
Planning in the Karnataka Watershed Development Project
nontraditional commercial
species, important nontimber
forest products, and
biodiversity values in
relevant forest cover types. A
number of methods are
emerging for inventorying
nontimber forest products
that hold promise for India
(Poffenberger and others
1992; Peters 1994, 1999;
Wong, Thornber, and Baker
2001).

o Make increased GIS

mapping capability a higher
priority. The development of
GIS in forest departments is

57
making slow progress in the states examined, constrained by limited financial, technical, and
human resources. A longer term goal should be to have individual micro-plans for
communities, or clusters of communities, prepared with higher quality maps, based on GIS
technology. This approach would lend itself to including digitized thematic data on soils, water
potential, topography, and basic cadastral information. The technology for this level of
mapping already exists in India and is being used in other sectors, such as watershed
development (figure 7.1). Significant increases in capital investment and operational budgets
will be required by both the center and the states for several years to accelerate progress with
initial digitizing and mapping systems for forestry.

o Strengthen division- and state-level inventory processes. At the state level, the biannual
Forest Survey of India provides satisfactory reporting of forest cover at the state and district
level for broad planning purposes. This information is not sufficient to support broader division
level management planning, however. States need to invest in more intensive continuous
inventory at the division level on a five-year cycle. Andhra Pradesh provides a practical model
to replicate that would complement improved community-based inventory data.

o Improve computerbased management information systems (MIS). Computer-based MIS

should ultimately link the departments GIS, inventory information from division and
community levels, more general forestry data, and information from other sectors, where
appropriate. Forest management is a dynamic process; all data, including map-based
information, must be regularly updated and stored in a system that allows open sharing to
support policy, planning, analyses, and reporting. A possible model for integrated application of
GIS and MIS to both micro-planning and divisional planning is being developed by the forest
department of Andhra Pradesh. Headquarters could be linked with district offices to share
inform through computer connections via land line phones, a wireless system, or the Internet.
Both Assam and Madhya Pradesh already have functioning Web sites that could be used for
this purpose. The Ministry of Environment and Forests also has a Web site with useful forestry
information that offers a model for states to study and build on.

o Establish permanent sample plots for growth and yield measurement. Growth and yield
studies require long series of field observations from plots established and maintained in a
range of forest cover types. They tend to be expensive and generally involve complex statistical
analyses. However, as community-based forestry continues to evolve, it needs to be based on
the design and evaluation of innovative silviculture systems, for which no precedent exists. One
essential element of improved growth and yield information is field data. State governments
should consider working in partnership with communities to establish and maintain permanent
sample plots to provide ongoing data for new growth and yield models for tree species
identified as important in a survey of micro-plans. Communities could be paid an annual
maintenance fee to protect the plots from illegal harvesting and provide regular data collection.
Potentially useful methods exist for extending growth and yield to nontimber forest products,
but these methods will have to be prioritized according to the economic importance of the crop
and partnered with appropriate research institutions in India and in other countries.

o Build a strong monitoring system. Monitoring is a critical element for greater

empowerment of forest management to communities but progress is hindered by a practical
dilemma. Unless communities can demonstrate effective forest stewardship for the small areas
under their responsibility, it will be difficult for state forest departments to allocate more forest
management responsibilities. Currently, however, communities cannot easily demonstrate
forest stewardship, because systems are not in place for them to monitor performance. New
approaches are needed to break this impasse, perhaps based on small pilot projects by

58
 communities showing strong interest and ability to assume a higher level of responsibility.
Local monitoring could be done by communities, beginning with a set of clear management
responsibilities, good baseline data, simple indicators, and achievable performance targets.
Periodic site visits by forest department field staff or private consultants would facilitate field
checking as well as provide an opportunity to offer technical advice. In addition, the forest
department, in collaboration with other relevant line departments, needs to adopt a method for
ongoing livelihood and poverty impact monitoring of forest communities (box 7.8). 44 This
would help track progress toward improving forest livelihoods and poverty, act as a learning
tool to help community forest programs evolve, and provide valuable information for
stakeholders. Local information can feed into division-level reports that could be aggregated at
the state level. A parallel task is
to develop the capacity in the Box 7.8. SMART Indicators for Monitoring Forest
Ministry of Environment and Livelihoods
Forests to collect state-level
monitoring information to According to the Centre for International Forest Research,
indicators for monitoring forest livelihood should be SMART
generate national reports and
(Simple, Measurable, Adapted to local conditions, Relevant
support national-level analyses. and reliable, and Time-scale appropriate). Indicators can
This kind of monitoring would monitor changes in forest- based communities with respect to
also help shift the focus of financial, physical, natural, human, and social capital. The
forest departments from monitoring system should use communities to gather much of
financial and input targets (such the information, with technical assistance from government or
as planting so many ha of trees community support organizations.
within budget), to targets
related to outputs (how many Source: Pandey (2005).
trees survive?), impacts
(potential contribution to wood supply), and outcomes, including measurably demonstrating
improvements in livelihoods.

Community-based forest management needs much more guidance from economic analysis.
There is a serious lack of capacity for economic analysis in both the Ministry of Environment and
Forests and the state forest departments. More focused economic analyses would support policy
reform, particularly to identify and evaluate incentives for communities, in the following five areas:
reviewing the costs and benefits of alternative tenure options; assessing the economics of
silviculture options for community forests; evaluating community incentives by allocating good-
quality forest along with degraded land in JFM; analyzing the costs and benefits of farm forestry;
and reviewing benefit-sharing schemes. A simple analysis suggests that commercial timber and
pole production as part of mixed forest architecture can offer high returns to communities (see
appendix 11). Moreover, augmenting timber production with subsistence nontimber forest product
in part of the forest under-story can increase returns significantly.

This finding corroborates that of Manoharan (2000), who claims that managing multi-species
forests for timber and nontimber forest products can increase annual revenue flows by 2032
percent compared with forests managed solely for timber. When faced with degraded lands, the
most efficient option is to manage the existing natural regeneration rather than undertake expensive
forest planting operations. Bamboo is a lucrative investment on degraded lands, but overall a mixed
forest with timber and poles, bamboo, and nontimber forest product appears to offer the highest
returns. These results suggest that during micro-planning, communities should consider putting at
least some of the allocated forest area into bamboo and nontimber forest product species, depending

44
The work currently undertaken by the Centre for International Forest Research (CIFOR) in Jharkhand is
financed by the World Bank and PROFOR. CIFOR is developing and testing simple tools for monitoring the
impact on livelihoods and poverty (see appendix 13 for background information).

59
on market access. Partnerships between the Ministry of Environment and Forests, state forest
departments, and national institutes, such as the Delhi University Institute for Economic Growth,
could be explored for contract research and training programs in forest economics. The Institute
already operates an economic training program with several central government agencies. The
Ministry of Environment and Forests could explore the benefits and costs of joining this
partnership. Together with state forest departments, it needs to build better links with existing
environmental economics networks, such as the South Asian Network for Development and
Environmental Economics (SANDEE). In the longer run, forest agencies would benefit from
stronger internal capacity in economics and policy analysis.

Providing more immediate revenues and subsistence products is an important incentive for
communities. As Kumar (2002) notes, having to wait for financial returns over a long gestation
period from regenerating commercial forests on degraded land provides little immediate incentive
for communities to actively engage in management and protect the forest through a formal
community forestry program. Where possible, a positive incentive would be to allocate a small
portion of healthy or semi-mature forest to communities in addition to degraded lands that are
subsequently rehabilitated. This approach is already acknowledged in recent Ministry of
Environment and Forests policy circulars on extending JFM to nondegraded forests, but it is not
being widely implemented. One hectare of high-quality teak-dominant forest harvested for timber
could easily yield immediate net revenues of Rs50,000Rs60,000 a year with a conservative
selective felling approach. These revenues would provide the community with financial capital to
invest in the forest and contribute to other local livelihood opportunities in the community. Based
on likely micro-plan outcomes, investments must also be expanded in degraded areas adjacent to
communities to promote natural regeneration for fuelwood and grasslands for grazing as
subsistence products.

IMPROVING THE MARKET SYSTEM FOR FOREST PRODUCTS

Major challenges lie ahead to enable those communities wishing to move beyond subsistence
production to engage in more commercial opportunities. The preoccupation of state governments
and forest departments on maintaining legislated monopoly marketing structures for certain forest
products, especially the most lucrative timber species, has hindered the introduction of more open,
efficient, and transparent marketing systems. A major obstacle in reforming forest product market
systems is to change the prevailing mindset that forest products are different from specialized
agricultural commodities and that marketing therefore has to be managed by the forest department.
This view is slowly changing in some states, particularly for unregulated nontimber forest products,
but it has not yet reached across to timber or regulated nontimber forest products in any meaningful
way. Given the forecast deficit in domestic wood and expanding opportunities for various
nontimber forest products both in national and international markets, many communities can play a
more substantive role as low-cost producers for commodity wood (fuelwood, construction grade
timber, poles); higher quality timber, such as teak and sal; industrial pulpwood and bamboo; and
nontimber forest products (Scherr, White, and Kaiomowitz 2002). This strategy would rest on
several key marketing policy thrusts, similar to ongoing agriculture reform in India (World Bank
2005a). It must be accepted, however, that not all forest-based communities will benefit equally
from market reforms. Local forest quality, distance to urban markets, the condition of access roads,
and the capacity of community institutions will all influence the potential of any community to
expand into commercial forestry production. Where conditions are conducive to greater
commercialization, the benefits may not be shared equitably among all community members unless
strong local institutions are in place. Greater commercialization with more valuable products, such
as teak, raises the risk of increased local corruption, exploitation from private buyers, and capture

60
of income gains by local elites. Global studies suggest that higher valued products tend to be
managed intensively by specialized producers in the community and yield higher incomes than
lower value products managed by less specialized producers (Ruiz-Perez and others 2004). For
nontimber forest products, this means that incomes may rise as a result of a shift toward intensive
cultivation inside or outside the forest and a move away from simply gathering products in the
natural forest. This has equity implications, as marginal farmers and landless may not be able to
participate in cultivated production. For motivated and enabled communities to capture higher
commercial values from at least part of their forest, what are the options for market reforms?

Contract growing schemes should be Box 7.9. Contract Farming in India

explored. Communities and farmers
wanting to sell commercial forest ITC, Tata, and Mahindra are three of Indias largest
products outside of local markets need conglomerates. All are becoming more involved in contract
access to major buyers or processors. farming to help farmers move up the value chain, boost
Outside of state controlled monopolies, yields, and increase incomes. Good examples of contract
contract sales see communities enter into farming are found in Punjab (dairy, rice, vegetables,
a forward agreement with processing groundnuts, seeds); Madhya Pradesh (wheat); Tamil Nadu
(rice and cotton); Haryana (vegetables); and Andhra Pradesh
and/or marketing firms, usually at (poultry). Royal Cotton Mills is helping organize farmers to
negotiated prices for a specified sales participate in a buy-back program. It provides farmers with
volume. This approach reduces risk and genetically improved seeds. The farmers then sell their raw
uncertainty to sellers, while purchases product to the company at negotiated prices on long-term
are assured of a more reliable supply contracts. If market demand falls, the Cotton Company of
over the specified time. Purchasers may India underwrites the purchases, so that farmers receive
also provide credit support, inputs, income on a continual basis. Crop insurance is also used for
storage facilities and technical advice to the crop and cotton price to provide greater security for
producers as part of the contract farmers.
agreement. There is growing experience
Source: World Bank. 2005a; unpublished Bank reports
with this arrangement in India for
agriculture (box 7.9) that can and should be extended to forest products through partnerships
(Kumar 2005).

Selected nontimber forest products should be promoted with these new market options. Many
nontimber forest products could be marketed through agricultural marketing systems, although
doing so might require states to amend the Agricultural Produce Market Committee Acts. This
change would facilitate contract marketing, organized retailing, flows of raw materials to agro-
processing industries, more competitive trading, and adoption of innovative marketing systems and
technologies. For nonlisted nontimber forest products, communities are generally free to sell excess
production in open markets, outside of the state legislated monopolies. The patchouli aromatic oil
model from Assam is a good example of contract growing. Andhra Pradesh has also demonstrated
innovative approaches to nontimber forest product marketing (box 7.10). In addition to increasing
quality and prices, villagers in Andhra Pradesh have reduced losses from deliberate underweighing,
receive full cash payments at point of sale, save time previously spent taking products to local
markets, eliminated price uncertainty, and improved incomes of women, who normally engage in
marketing.

61
Supplying specific nontimber forest products to organic markets is another lucrative option
to explore. Returns from organic produce are generally higher, depending on the premium the
consumer is willing to pay.
According to some estimates, Box 7.10. Lesson from Andhra Pradesh for Improving Forest
the global organic market, Livelihoods
worth $17 billion in 2000, The Andhra Pradesh Rural Poverty Reduction Project has helped
may reach $31 billion by support rural development by mobilizing 450,000 self -help groups,
2005. Indias current share of 29,000 village organizations, 800 federations, and 5 million households.
These institutions and their members have cumulative savings of more
this market is just 0.001
than $20 million and are mobilizing more than $150 million of
percent (Scialabba and
commercial bank loans a year. The program is supporting development
Hattam ). of market linkages in many commodities, including several nontimber
forest products. It is also supporting investments in local value addition
Most wild nontimber forest and development of market linkages with the private sector. The project
products are by default has developed innovative institutions, including a partnership cell that
organic, but organic facilitates linking community organizations with a range of private
certification is required to sector organizations. Areas in which partnerships have been developed
receive a premium price. A include commodity trading, local value addition, buy-back
number of certifying agencies arrangements, rural retailing, a livelihood business school that develops
are operating in India. A skills among rural men and women to access service sector jobs, and the
multitude of nontimber forest development of organic cotton brands. This integrated approach has
products have been certified many valuable lessons for improving rural livelihoods in forest fringe
in other countries according communities.
to organic standards, Source: Kumar (2005).
including berries (Finland),
hearts of palm (Brazil), chicle (Mexico), maple syrup (United States), cohune palm (Guatemala),
and mushrooms, medicinal plants and plants used by the cosmetic industry (Walter 2002). Global
experience suggests that simple steps taken to improve the quality of nontimber forest product can
have significant financial benefits for communities. Communities need technical and financial
assistance to improve quality control during and after harvesting, follow better grading practices,
gain access to storage facilities to allow sales in off-peak times, and improve availability of market
information. They also require better access to commercial credit, to help finance small business
development around nontimber forest products and other forest products.

Bamboo, timber, and fuelwood also have strong potential for contract sales. The experience
with farm forestry and nontimber forest products such as patchouli in Assam and other nontimber
forest products in Andhra Pradesh offers useful lessons for greater market access by communities

Table 7.2. Economic returns from improving the efficiency of nontimber product production
ACTIVITY
Improve harvesting methods.
Reduce postharvesting losses through:
improved forest storage and/or transport
improved local warehouse/storage
better transport to processing plants
Improve transportation through
volume shipping
backhauling
processing product to reduce water and waste
Hold product in storage and sell in off-season.
Add value through local processing.
Obtain better pricing information.
Improve credit terms.
Negotiate income sharing deals with processors.
Source: Clay (2004).
BENEFIT
Increases income by 10% or more.
Reduces product loss by 5% or more.
Reduces product loss by 25% or more.
Reduces product loss by up to 35%.
Reduces shipping costs by 10% or more.
Reduces transport costs by up to 50%.
Reduces costs by up to 70%.
Increases gross income by up to 200%.
Increases gross income by up to 500%.
Increases income by 10% or more.
Reduces credit costs by up to 75%.
Increases income by 10% or more.

62
for bamboo, nonlisted timber, and fuelwood (table 7.2). Farm forestry saw a period of initial growth
in the 1970s, followed by a decline in the 1980s, as farmers in many states failed to receive
expected returns (Saigal, Arora, and Rizvi 2002; Saigal 2002). Primary reasons included
inappropriate silviculture, poor-quality seedlings, lack of capacity building to farmers for plantation
maintenance, poor organization of farmer producer groups, oversupply of production, and
restrictive laws and regulations governing transport for some species.

Farm forestry and contract marketing are re-emerging, benefiting from lessons of the 1980s
and generating interest among processing firms. There is no reason why, after a period of
transition, this approach cannot be extended from farmers to many communities as legal suppliers
of commercial timber, bamboo, and fuelwood from both existing high-quality forests and
rehabilitated stands on degraded lands. This is particularly true in states such as Assam and
Jharkhand, where legal timber harvests are quite small as working plans are being prepared and
approved. When working plans are approved, trade licenses could be issued by the forest
department or panchayats to communities that successfully demonstrate sustainable forest
management on reserved or protected forests. The license would allow the community to negotiate
contract agreements with private buyers for the sustainable harvest of different products as per the
micro-plan. The contracts could be for standing timber (where the buyer does the selective
harvesting) or for roadside sales (where the community does the felling).

There is keen interest by private processors, such as sawmills, for these simple and direct
arrangements for timber procurement. One potential issue is subsidized competition from state
plantations. In Uttar Pradesh the state forest department is supplying major wood-based industries
with plantation wood at 20 percent less than the prevailing open market rate (Saigal, Arora, and
Rizvi 2002). Giving communities a choice of production and marketing options (through the forest
department or contract sales to processing firms) may be a logical starting point. Forest departments
often raise two concerns about opening up timber, bamboo, and fuelwood sales. One is the loss of
revenue to the department (and ultimately the state) as communities sell their timber outside of state
marketing corporations. This issue can be addressed through a review and reform of forest fiscal
systems. Alternatives to the cumbersome and opaque JFM benefit-sharing scheme, such as royalty
charges or downstream value-added, sales, or income taxes, are available. A second issue is
ensuring forest sustainability. This issue can be addressed through a more robust monitoring
program.

The government should support producer organizations. These organizations can improve
networking and access to more efficient markets. They can strengthen sellers market position and
allow larger, consolidated consignments of timber, bamboo, fuelwood, and nontimber forest
products to be sold directly to large processing or marketing firms through auctions or various
contract agreements. Producer organizations can also help overcome the countervailing power of
middlemen and money lenders. They can pool resources for storage facilities and make it easier for
communities to receive training on quality control and value addition.

Producer institutions can consist of a few communities grouping together informally as a

cooperative for marketing around geographic or tribal clusters, or they can be part of larger
community-led state associations that focus on specific commodities. There is considerable scope to
link nontimber forest products with existing and emerging agriculture cooperatives. These kinds of
institutions may need initial assistance to develop, as the Madhya Pradesh nontimber forest product
federation did, but within a reasonable time period these institutions should have a fully
independent federation at the apex, with elected officials representing communities and a board of
directors that includes a minority of forest department members. Andhra Pradesh, where milk
cooperatives have been operating successfully for many years, also offers a model that could be

63
replicated in other states. A reason often cited for their success is the power-sharing arrangement
and democratic structure, which helps ensure management integrity. Experiences in Mexico with
community-managed timber also offer positive lessons for India (box 7.11).

Box 7.11. Strengthening producer organizations in Mexico

In the 1980s, a number of indigenous communities in the poor southern states of Mexico formed a
regional organization and went on to form forest enterprises, with initial assistance from government
and the World Bank in the late 1990s. Approximately 256 communities are now members and have
completed land-use and forest management plans that encompass community forests and protected
areas. Training courses have been implemented on silviculture, management and marketing of wood
and non-wood products. Private sector consultants are often used to provide technical expertise. The
area under forest management has increased from 500,000 to 600,000 ha and total sustainable wood
production increased from 400,000 to 600,000 m3 per year. More than 13,000 ha of old-growth forests
have been protected in biological reserves and 90,000 ha of commercial forests have been certified by
the Forest Stewardship Council. Wood production generates US$10 million in revenues each year.
About 1,300 jobs have been created in wood production and another 175 jobs in NTFP marketing. As
well, the state government has increased its tax revenues by US$1 million per year and the communities
have contributed around US$1 million per year to internal social development.
Source: PROCYMAF (2000); DeWalt, Olivera and Betancourt-Correa (2000)

It is important that producer organizations be led by communities and be demand driven.

Their goal should be to facilitate marketing by communities (and farmers) rather than to
replace a pure state monopsony with a quasi-public monopsony requiring government
subsidies to survive. 45 Many local organizations may fail, due to corruption, rent capture by elites,
and other problems. As Saxena (2001) suggests, social stratification and internal inequity can affect
producer organizations, and these problems may become worse with commercialization. This
finding strengthens the argument that communities need substantial investments to build social
capacities and strong, inclusive institutions as part of reforms of tenure and markets. These
institutions need to develop organically and be strong enough to function without government
subsidies. Only then will communities truly be empowered.

Market information sharing and
and sharing market intelligence
within government line
departments, communities, and
farmers must be strengthened.
One policy option to explore is
extending the e-Choupal
concept to forest product
marketing (box 7.12). Forest
products could be added to this
network, or a new network
could be established with
private sector support. The
Internet is a powerful tool for
sharing information. The
networks need to be strengthened. Mechanisms for gathering
Box 7.12 Extending the e-Choupal concept to forestry
The e-Choupal concept opens opportunities to access expert
knowledge to the smallest individual farmer in India. More than 3.5
million farmers in India are connected to markets through local
solar-powered Internet access, with network support from ITC.
Farmers can check market prices for various commodities and then
either choose to sell through ITC or in local markets. Providing
easier access to market intelligence through this network allows
farmers to counter the market power of middlemen, who monopolize
information, input sales, and commodity purchases.
Source: www.itcportal.com

45
Examples of poorly performing quasi-public cooperatives include the Tribal Development Cooperative
Corporation (TDCC) in Orissa, Large Areas Multi-purpose Cooperative Societies (LAMP) in West Bengal,
and Tribal Cooperative Marketing Development Federation (TRIFED) in Chhattisgarh (N.C. Saxena,
personal communication, 2005).

64
Madhya Pradesh Minor Forest Products Federation Web site lists the kind of information a market
Web site could offer people and organizations with Internet access.

Another option is to expand the Agriculture Market Intelligence Network (AGMARNET) scheme
in most states to encompass various forest products. 46 In the longer term, state forest departments
should strengthen information sharing and networking by providing ongoing product monitoring
service to collect market prices; providing quality and volume information, possibly as part of an e-
Choupal network; undertaking market analyses for specific products to share with communities;
and maintaining a list of active traders to help communities, farmers, and producer organizations
contact traders to get competitive open market prices.

The role of the forest department in marketing needs to be refocused. The evolution of
marketing away from inefficient, high-cost, and restrictive state monopsonies toward a system in
which the state is more of a facilitator and provider of information and high-quality technical
support should be encouraged and gradually extended to a wider range of products. For some
marketing corporations, such as those in Jharkhand, a strong case exists for eventual liquidation
once more efficient market channels and institutions for communities and farmers emerge. By
contrast, the timber marketing system in Madhya Pradesh is competitive and is returning positive
revenues to the treasury, but it absorbs a significant share of the state budgets allocation to the
forest department.

Policymakers need to evaluate the opportunity cost of maintaining these structures versus
adopting alternatives outlined earlier in this report. States should retain an important role in
marketing by facilitating greater private sector competition in local markets, strengthening technical
services to communities and cooperatives to facilitate value addition, promoting direct market
access and sharing of market intelligence, offering technical services in silviculture, providing
credit for storage facilities, and monitoring market performance. Technical services must deliver
knowledge founded on sound and relevant applied research.

The forest departments and marketing corporations in Andhra Pradesh and Madhya Pradesh have
made satisfactory progress toward helping communities improve sustainable nontimber forest
production and harvesting, adding value, and building on local knowledge systems. The state may
also provide a valuable function in supporting remote communities and farmers as buyers of last
resort for forest products at a minimum price, where market failure occurs due to distance, poor
roads, or other factors.

This type of government role may be well suited to kendu, because of the scale of operations
(mobilizing Rs15Rs20 billion in financing to purchase the leaves in a short 40- to 50-day season)
and wide geographic range in many states. Eight reforms should be considered:

Collectors (and people with kendu on private land) should have the right to market their
product directly to the private sector at higher market prices.
Marketing federations and corporations should be led by community representatives and
return all profits to collectors.
Prices paid to collectors should reflect at least minimum daily wages.
Villagers should assume responsibility for managing collection centers after appropriate
capacity building.

46
The scheme provides Internet-based sharing of market information among agriculture produce market
committees in most states in India.

65
 Prices from federations should reflect quality standards rather than a uniform average price.
Quality should be acknowledged at the point of sale rather than a year later, when profit
shares are distributed.
The group insurance scheme initiated in Madhya Pradesh should be replicated in other
states as a welfare measure.
All records of local people employed, payments, and deliveries should be posted in villages
and on a central Web site as public records.
An independent commission or community-led cooperative association should be
constituted to review kendu marketing performance at the state level and suggest practical
measures to continually improve transparency, reduce corruption, and increase local
incomes.

National incentives should be established for market liberalization. The government of India
should consider instituting a forest diversification program similar to the recently announced
Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization
scheme. That scheme is designed to induce large investments from the private and cooperative
sectors for setting up agricultural markets, marketing infrastructure, and support services, such as
grading, standardization, and quality certification. The new budget announced the launching of the
National Horticulture Mission, with an allocation of Rs6.3 billion in FY 2006 to promote backward
and forward linkages in the horticulture sector. States that amend their agricultural produce and
marketing committee acts will be eligible for the new scheme. There are many parallels between
the needs this scheme is addressing for agriculture and the issues identified for diversifying
community forest production and marketing.

The forest fiscal system should be reviewed. The government should consider conducting a
national review of the forest fiscal system. The review could be undertaken by the Ministry of
Finance or the National Planning Commission, with a significant supporting role by the Ministry of
Environment and Forests and state governments. As JFM gradually transforms into a model in
which communities have greater rights to harvest their forest products based on an approved
management plan and more flexibility to choose private marketing channels, the current benefit-
sharing system will become less relevant. A fiscal system review should identify national and state
government goals for revenue collection from communities managing state forest land. These goals
include rural development and allowing communities to keep most if not all primary forest
revenues; the state capturing some or all of the economic rent on primary commercial outputs; or
collecting enough revenues to cover department operating costs. The review should identify and
evaluate options for fiscal revenue
instruments such as assessing royalties Table 7.3. Nation Fiscal Systems in Selected Countries
on farm gate prices for various Cameroon 50 percent of rent goes to federal
commercial forest products, sales or government, 40 percent to local councils,
value added taxes levied on primary or and 10 percent to communities.
secondary producers, downstream Brazil All revenues except a forest recovery fee go
income taxes; permit fees for to the federal government.
communities, or a general land rent. It Cambodia 20 percent of revenue goes to forest
should also consider how to develop a department.
more transparent fiscal system with Canada On crown land owned by provincial
governments, large forest leaseholders pay a
greater accountability among different
stumpage fee on a per cubic meter basis and
actors. in many cases a forest protection land tax.
Indonesia Tax and nontax revenues are differentiated,
Experiences in other countries could be with nontax revenues used for reforestation
used to generate ideas for consideration Source: Oksanen (2004); World Bank team.
(table 7.3). If communities have more

66
management responsibilities, there is less merit in levying royalties on primary production. In this
case, more emphasis could be placed on downstream taxes through value-added taxes or income as
primary products are transformed and value added. The fiscal system should examine linkages
between state expenditure on forest management; the level of economic activity generated (income,
GDP, poverty reduction); and revenue generation downstream along the value chain. At the same
time, it is critical to emphasize the concurrent need to strengthen community capacities for
production and marketing.

While exploring new fiscal systems for community-based forestry, a number of experiences and
cautions must be accounted for. Karsenty (2000) provides a summary of economic instruments for
tropical forests, based on a case study in the Congo Basin. He cautions:

Wherever possible, market mechanisms should be introduced in place of administered systems,

auctions in place of royalties, marketable permits in place of taxes. Care must be taken, however, not
to confuse efficiency with ideology: a mechanism may be theoretically efficient, but the economic,
political or institutional conditions may not be right for it to work and serious prior study will need to
be undertaken to determine whether it will be feasible in one country or another. All the same, market
mechanisms are, and should always be, overseen by a regulatory policy defined and implemented by
government, and administrative regulation is still necessary to oversee management practices.
Government intervention must be aimed at organizing competition where it is needed to encourage
innovation and economic efficiency and to establish the operating procedures of markets set up to
allocate rights to exploit and export forest resources. This means that governments must acquire the
ability to use these economic instruments effectively, which is not currently the case. It would be a
tragic misunderstanding to think that depends on rolling back the state and privatizing its main
functions. The organization of competitive markets, and of fair, transparent procedures for allocating
resources, implies that the public authorities must genuinely control the mechanisms.

The fiscal system can give strong signals to forest managers, be they government, communities or
the private sector, in terms of putting a value on the resource and providing incentives for
sustainable management. Wherever possible, market mechanisms should be used. Government
systems, particularly those in developing countries where forest monitoring and statistics are weak,
are usually unable to provide the correct signals.

EFFECTIVE AND FLEXIBLE INSTITUTIONAL MODELS

Constraints in forest departments with field staff and pressure to downsize, an overly broad
mandate, and limited, albeit slightly increasing operating budgets suggest major repositioning is
required to provide more effective and focused service delivery in key functional areas in order to
improve rural livelihoods and conserve the forest. 47 A new partnership model is needed that
recognizes inherent comparative strengths and weaknesses by forest departments communities,
private forestry consultants, and community support organizations. A range of options is available
for new roles and responsibilities (see appendix 14 for details). Some of the main points for
consideration include the following:

47
Constraints include the number of staff (which is either fixed or declining); the high average staff age,
which implies large-scale retirements in the next decade; and inadequate field equipment and transport to
carry out even basic forest management support to communities.

67
 Moving toward a system of private forestry consultants has several merits. First, it would
gradually build up a private market for these services. Second, sharing some of the field
responsibilities with consultants would allow forest department to focus limited field staff
on other core functional
roles. Third, it would
Box 7.13. The Madhya Pradesh Lok Vaniki Initiative
provide employment
opportunities for technical Madhya Pradesh is encouraging forestry on private and
graduates and retired degraded revenue land. Chartered foresters help prepare
foresters. Governments or management plans and silvicultural operation in these forests.
donors would need to The M.P. Lok Vaniki Act 2001 (M.P. Act No. 10 of 2001)
subsidize these services provides an opportunity for willing landholders to manage their
until communities began to own forests.
generate sufficient revenues
to cover these costs. The net The law encourages owners of private forests and other tree-
revenue from 1 cubic meter clad areas to manage their natural resource on scientific lines,
in order to optimize both economic and environmental returns.
of sal sawlogs could cover
The act provides for active involvement of village panchayats
the cost of two days of a and gram sabhas in preparing, implementing, and monitoring
local consultants time. The management plans prepared for private areas. Chartered
Lok Vaniki program in foresters provide technical assistance to people willing to take
Madhya Pradesh offers a up forestry on their private holdings.
good model to study and
possibly extend to JFM Source: http://www.mp.nic.in.
communities (Box 7.13)

Local authorities have a growing role and mandate for forestry that needs nurturing.
Panchayats have a strong legal and constitutional mandate for specific forestry functions
on lands within their jurisdiction. Assuming that contradictions between the PESA and
forestry legal frameworks are resolved, panchayats will need to establish stronger internal
capacities and awareness about forestry and build stronger partnerships with forest
departments for technical services. New national legislation being proposed by the Ministry
of Tribal Affairs would assign 2.5 hectares of state forest land to specified tribal households
under long-term leases on land on which they have been living for generations. The gram
sabah would be the competent authority in recognizing vested rights of forest-dwelling
tribes. Much of this land is not forested but is used for agriculture. If promulgated into law,
the bill would require new partnerships, and working relationships would need to be
established between tribal agencies, forest departments, tribal communities, and local
authorities.

What are the potential implications of these shifts? Further evolution of JFM will require
transforming the roles and responsibilities of key players in the forest sector. By focusing on core
business functions and sharing more responsibilities with other actors, state forest departments
should be able to reduce current staffing levels (as Madhya Pradesh is trying to do) and free up
more financial resources to support critical core functions and better technology for inventory,
mapping, monitoring, and knowledge sharing.

Some 195,000 permanent staff currently is employed in the central and state forest departments.
The density of field staff in the three states examined ranges from 453 hectares per officer in
Madhya Pradesh to 2,421 hectares per officer in Jharkhand. By contrast, the figure in the United
States is one forest officer per 2,200 hectares; in Honduras under new reforms it is one officer per
2,100 hectare (Molnar 2005). A more effective system in the longer term might reduce staff
densities, assign fewer responsibilities, and support staff with better equipment, transport, and

68
monitoring systems. The objective is to move away from a system in which the state tries to
provide detailed oversight on every hectare of forest (with resulting poor service delivery) toward a
system in which implementing agencies have more focused oversight and broader responsibilities
are gradually allocated to communities, the private sector, panchayats, and community support
organizations. The first step is determining which jobs must be performed by state forest
departments and which can be done by other actors. This report provides options for beginning a
dialogue, leading to gradual reforms of roles and responsibilities. Appropriate capacity building
program need to be developed for forest departments to help with this transition, and for
communities, especially those demonstrating high levels of awareness and interest in testing new
approaches and taking on greater responsibilities for forestry.

Private sector investment is needed in production and marketing. Lack of adequate internal
savings or access to formal capital markets means, that forest fringe communities are usually unable
to finance major investments in forest resource development. Both government and the private
sector can help finance the initial forest crop to build a sustainable forest products supply that can
be marketed and generate revenues. Partnerships involving large industrial leases are not
recommended without careful study of the impacts on small-scale producers. Global evidence
suggests that industrial leases often supply low-value commodity timber products at costs below
those of communities due to economies of scale and in many cases indirect state subsidies, such as
below-market stumpage costs. At the same time, large processing firms are moving away from
managing their own forest resources toward partnership agreements with farmers and communities
as suppliers. These approaches have huge potential in India, where imbalances between the supply
of and demand for fiber are conducive for developing new partnership models in which
communities supply large timber processing mills or fuelwood markets.

The International Finance Corporation (IFC) is working with clients in Africa and Latin America to
develop emerging opportunities for strategic partnerships between forest industries and
communities for commercial timber (box 7.14). One precondition set by IFC is that communities
must have the right to market their timber independently of state marketing corporations or forest
departments.

Box 7.14. International Finance Corporation Support for Partnerships Between

Communities, Farmers, and Industry

The International Finance Corporation is supporting partnerships in the forestry

sector in many ways. These partnerships will:
Provide technical and financial analysis of small and medium-scale forest
industries to identify ways to upgrade equipment and improve their
competitiveness with imports.
Pilot test partnerships between government, processing enterprises, and
communities, with support of the IFCs Corporate Citizen Facility.
Provide technical assistance for development of business models, financing, and
training in small-scale forest enterprises.
Promote improved market access for small-scale forest enterprises through
collaboration with the World Wildlife Funds Global Forest and Trade Network.
Build the capacity of the forest industry, related NGOs, and relevant associations
of communities or farm forestry owners for independent monitoring and possible
certification
Finance commodity-based research to identify issues and opportunities.

Unpublished Bank reports

.

69
Carbon financing represents another option for generating finances and drawing the private sector
into forestry production and marketing (box 7.15). The challenge for policymakers in India is to
find the right mix of policies and incentives to attract private investment that can partner with
communities. Out-grower schemes and contract growing, noted earlier, represent innovative
approaches.

Box 7.15. Carbon Financing in Community-Based Forestry in India

A new World Bankfunded project in Andhra Pradesh and Orissa proposes to mobilize and
encourage small and marginal farmers to raise plantations of tree species with high rates of
carbon sequestration in their farmlands. The project will:
Provide advice and training
Use clonal seedlings to establish high-density plantations.
Promote partnerships between farmers and local paper companies to purchase wood.
Encourage farmers to adopt agro-forestry practices such as intercropping during the first year
to meet their subsistence costs.
Provide short-term financing to farmers from an upfront payment by the global BioCarbon
Fund.
Arrange long-term credit to small and marginal farmers to meet the cost of plantation and
maintenance.
Involve local communities in the protection of plantations.
Generate additional income from carbon credits to farmers.

Source: World Bank documents.

Fuelwood supplies need to increase, with the private sector playing a role. Village fuelwood
plantations have the potential for significant welfare improvements, especially for women, through
increased biomass consumption, decreased collection time, and reduced pressure on natural forests.
Kholin and Ostwald (2001) estimate the willingness of the average village household in Orissa to
pay for community fuelwood plantations at Rs5,500 per hectare per year. This willingness reflects
the desire by women to collect fuelwood closer to home rather than foraging for branches and
windfall from forests several kilometers away.

Fuelwood plantations would also reduce inter-village conflicts. To augment limited government
resources, opportunities for private sector investment need to be explored that would help establish
village plantations (on protected forests or wasteland) to meet subsistence needs of villagers while
generating excess production for commercial sales to urban markets, hotels, hospitals, and
companies, such as tea companies. Partnerships between the state (which would provide wasteland
or degraded forest land to communities under secure and legal tenure); people (who would establish
and manage the stands); and the private sector (which would provide the financing and marketing
channels) have potential, but they require careful economic, market, and social analysis.

Delivering integrated rural development services to more remote forest fringe communities
requires new models for service delivery. To help identify and evaluate options, a state-level
review of rural service delivery programs in forest fringe communities is suggested, coordinated by
the chief ministers office. Options that could be evaluated include transforming state forest
departments into broader rural development agencies for remote communities outside revenue
lands, supported by additional financial resources and training; strengthening mechanisms for more
collaborative rural development planning, budgeting, and program implementation at the district
and community level among relevant line agencies such as forestry, rural development, tribal

70
affairs, agriculture, minor irrigation, water, and panchayat raj institutions (box 7.16); and merging
the functions of the FDA and the District Rural Development Agency at the district levels, chaired
by the district magistrate.

Box 7.16. Options for Delivering Rural Development Service in JFM

The World Bankfinanced Assam Agricultural Competitiveness Project is improving rural

development in communities through a wide range of livelihood options. Participating line
agencies are represented through project and district coordinating bodies. The World Bankfunded
Gemidiriya Community Development and Livelihood project in Sri Lanka established a Peoples
Company to manage a Village Development Fund. Allocations were 10 percent to capacity
building; 45 percent for an infrastructure development fund; and 45 percent for a livelihood
improvement fund, split up among a savings and credit fund (85 percent), skills development for
youth (10 percent), and a one-time grant for the poorest people in the village.

New community forestry projects financed by the Japan Bank for International Cooperation in
India provide villages with Rs100,000Rs1 million for rural livelihoods and forestry development.
New project designs may have three phases (preparation, implementation, consolidation).
Coordination with other line agencies is effected through a district level committee headed by the
district collector.

Source: World Bank reports

Whatever model is chosen, government agencies such as tribal affairs, agriculture, and rural
development need to play a stronger role in rural livelihood programs linked with forest-based
communities. A study based on community report cards of local government service delivery
could help guide this review process. 48 Where local authorities have jurisdiction over forest
resources, joint capacity building with the forest department would be helpful in forging closer
working relationships that would benefit communities. Another idea for strengthening
interdepartmental cooperation for rural development is to establish a staff cross-exchange program,
in which professional officers of forest department exchange positions with counterparts in other
line departments, such as rural development. New community-based forestry programs could also
be twinned with community-driven development initiatives, such as District Poverty Initiative
programs to provide communities with livelihood incentives while forests mature. Nonforest
livelihood measures include self-help groups and income-generating activities, agricultural support,
tubewells, fish ponds, and water harvesting.

Small-scale testing of program merging is currently being undertaken in Andhra Pradesh, with
favorable results. In Assam a pilot forestry project in two districts has been merged with the
statewide Assam Agricultural Competitiveness Project, a Bank-funded project that broadens
livelihood opportunities and community support organization support for community development.
The project has also set up effective coordinating institutions among participating line agencies.

Advisory bodies for forestry and rural development are needed at the state level. Rural
development in forest fringe communities is complex and involves a number of actors. State
governments should consider establishing a Forestry and Rural Development Advisory Board or
similar body, led by an independent senior chairperson, with senior representatives from key
government rural development agencies, tribal leaders, and selected community support
organizations. Under one approach, the board would report to the state minister for environment
and forests, advising him or her on priority actions for forestry and rural livelihoods and policy

48
This kind of study was completed in Jharkhand in 2004 (Public Affairs Foundation 2004).

71
reform and ensuring active public participation where required. A second option would be to have
the body report to the chief minister. This approach would allow the proposed board to focus on
wider rural development and coordination issues. All these bodies must be viewed with caution,
however. Experience often shows these institutions often exist on paper but rarely meet, that they
are used more for monitoring than coordination or strategic guidance. The proposed Forestry and
Rural Development Advisory Board could be an effective body to guide the transition toward
community forestry management. States such as Assam already have bodies such as wildlife
advisory boards that could serve as models.

State-level community forestry associations need to be established. Community forestry

associations could be established in each state in order to level the playing field in terms of power
relationships with government. An association would bring together interested villages involved in
community-based forestry in a forum to articulate common goals and issues to government and to
serve as a focal point for communications, education, market intelligence, and training programs.
Tribal leaders and women would need to be a central part of such an organization. A small capital
grant would provide seed money to pay for a small office, equipment, membership drives,
registration, development of a data base, and production of materials. The grant could come from
the central government or donors, on a declining basis over three to five years. As communities
begin to earn higher revenues from forestry operations and more communities participate in forestry
development, external funding could gradually be replaced with annual contributions from
communities. With 13,698 JFM committees and an annual levy of Rs500 per committee, for
example, Madhya Pradesh would generate Rs6.8 million ($152,000) a year. Even if only one-third
of the communities were functioning and contributed, there would more than enough resources to
sustain a small office secretariat and strong institutional support programs. It is important that these
institutions grow organically.

Information must be shared across institutions. India is blessed with a range of experiences and
abundant information on JFM and related topics from government agency reports, Web sites,
research institutions, community support organizations, and external agencies. It is extremely
difficult, however, to sort through the thousands of relevant reports and articles scattered in
different locations and forms. Stakeholders involved with JFM in India cannot easily build their
knowledge bases or share experiences from India or other countries where community-based
forestry has gone through the same transitions.

In partnership with appropriate community support organizations and international organizations,

the government needs to create a strong and sustainable national multi-stakeholder community
forestry network. These networks should build on existing systems, such as the Resource Unit for
Participatory Forestry (RUPFOR), which is housed in a private NGO and acts as a stakeholder
forum in close consultation with the Ministry of Environment and Forests. Discussions with various
stakeholders suggest that the RUPFOR could be strengthened, by expanding Web links, offering
publications electronically, and organizing more workshops and field visits, for example.

An effective network requires strong financial and technical support. It should constantly gather
information on thematic issues and innovative solutions from within India and globally, post
information that can be downloaded for free, offer training materials, and create and manage
focused e-discussion groups on community forestry issues. The RUPFOR network could be
reviewed by interested stakeholders, who could identify ways of making it even more accessible
and supportive to community-based forestry from policy level to field officers. At the same time,
the JFM cell in the Ministry of Environment and Forests could be reviewed to assess its
effectiveness and determine how to better integrate it into national and international networks.

72
Knowledge sharing must also occur through personal exchanges of experiences of policymakers,
government officials, and community members. There are abundant opportunities for cross-
fertilization between leading and lagging states; tapping this wealth of internal knowledge is critical
for moving all states farther along the community forestry continuum. An expanded program of
exchange visits within India could facilitate this process. Another option to explore is establishing
model community forests in states in which progressive reforms and processes can be tested and
used as demonstrations. An extension of this option would be to twin leading forestry communities
with counterparts in other countries to facilitate cross-cultural experience sharing. Experiences in
other countries offer great scope for sharing information and lessons learning. A program for
international exchanges is needed in partnership with international NGOs and donors. Opening up
India to other global experiences can be a powerful catalyst for change.

Potential for Welfare Gains from Proposed Reforms

An example from Jharkhand illustrates the productive potential of forests and the possible
gains in total income from implementing proposed reforms. 49 Based on three alternative
scenarios of increased productivity, output, and marketed commodities; projections of increased
JFM area and forest productivity; and a sustainable selective timber felling system augmented by
modest nontimber forest product production, by 2020 a typical JFM community could increase
annual forest income by less than Rs200,000 to more than Rs1 million. At the same time, annual
revenues per hectare collected by the state government could increase tenfold to almost Rs700 per
hectare.

At the national level, total forest income from commercial sales could rise from an estimated
$222 million in 2004 (worst-case scenario) to about $2 billion a year in 2020 (best-case
scenario). Furthermore, with a 20 percent increase in nontimber forest product prices due to local
quality improvements and modest value addition and 10 percent increases in timber and bamboo
prices from quality enhancements, annual market-based incomes could increase another 11 percent,
or $220 million, by 2020 in the best-case scenario. Communities would continue to enjoy
subsistence benefits from the forest. The imputed net subsistence value of fuelwood and fodder
alone could be worth another $1.1 billion a year. 50

Conservation values from the forest are also important. Ecological and ecotourism benefits
increase net income from 1.1 percent to 2.4 percent of GDP (Chopra, Bhattacharya, and Kumar
2002). This represents an increase of $6.2 billion from the entire forest cover in India. Given that
JFM forests currently represent about 27 percent of total forest cover, a simple assumption is that
27 percent of these gains ($1.7 billion) could be derived from current JFM forests as they mature.
This model is very basic and produces only order of magnitude estimates. More complex models
could be based on refined growth and yield estimates by region and forest types, more precise data
on prices and costs, and different assumptions about how a typical community forest is allocated
across various land uses.

Commercial fuelwood could be another option for increasing value addition from the forest
for communities. With better market access, villagers could be induced to increase forest stocking
on their private farm holdings through agro-forestry, which can generate food, poles, timber, raw

49
See appendix 15 for more information on the Jharkhand and national projections.
50
This figure is based on 8.4 million families (or households) involved with JFM (Bahuguna and others
2004), average gross subsistence value for fuelwood and fodder from case studies in Jharkhand and Assam
(see appendix 4), and net values of 50 percent of gross values to account for collection time.

73
materials for crafts, and fuelwood. If some communities produce lucrative aromatic oils or
medicinal plants for international markets, net returns could rise even more.

Production of timber could increase to almost 20 million cubic meters by 2020, making a
significant contribution to Indias deficit in high- and mid-value hardwood. It would also improve
the balance of payments, by reducing the need to import logs. Annual community income could
increase to almost Rs1 million, an incremental increase of Rs5,000 per household.

These projections are based on communities selling logs to local sawmills or larger intermediaries
at the roadside. Moving into secondary processing by turning logs into squares or lumber is a
logical progression for some communities or a consortium of communities, which would add
significant value and increase local incomes further.

The main message is that even under very conservative assumptions, the asset value of forest
resources has great upside potential under proposed reforms, as community-based forestry
evolves and expands, forest productivity improves, and better market channels open up. This
simple analysis reveals that community-based forestry, coupled with investments in increasing
forest productivity, could substantially expand rural incomes and increase revenues to the state
through downstream taxes. Yet this potential will not be realized until governments address the
fundamental issues and constraints that are hindering more effective development of community-
based forestry livelihood opportunities.

Priorities and Phasing of Reform Options

A mix of reforms is needed at both the national and state levels (table 7.4). The array of reforms
is complex and needs to be phased carefully. Priorities may emerge from recommendation in the
forthcoming report of the National Forest Commission. But based on experiences in India and other
jurisdictions, it is suggested that reforms initially focus on small actions that have a good chance of
success, provide incentives for communities to participate, and encourage government to implement
more challenging reforms. These reforms will require significant financial and technical support.
Current national and state priorities for fiscal allocations need to be reviewed and more attention
given to the core business functions of government, including more targeted forest R&D,
information networks and exchange programs, remote sensing, mapping, and monitoring. While
forest rehabilitation remains a critical national priority, creative financing solutions and incentive
programs involving the government, private sector, and communities need to be explored, through
the IFC, for example. In addition, sustained and perhaps more coordinated donor support is needed
to community forestry, building on the comparative advantages and experiences offered by the
principal actors (the Asian Development Bank, the Japan Bank for International Cooperation,
DFID, and the World Bank, among others). Donor funds can play a critical role in building
institutional capacities, undertaking strategic sector work, and supporting knowledge sharing.

74
Table 7.4. Options for and phasing of proposed policy and program reforms

Reform/actor Timeframe Recommended policy or program

Policy and legal reform to support better resource tenure and management rights for communities
Government Short term Build national vision for forestry and community forestry based on National Forest
of India Commission report and other studies.
Medium
term Establish national policy guidelines on tenure reform to strengthen community resource
rights.
Conduct major review of decentralization, PESA, and JFM legal and regulatory conflicts,
Long term and identify short and long-term reforms.

Consolidate national forestry legislative reforms.

States Short term Institute processes to identify and acknowledge historic forest rights that have a legal basis.
Disseminate information on legal and policy framework to communities in local languages.
Provide legal training to forest department staff, sensitize police and judiciary to community
forestry issues.
Medium
term Review and strengthen state forest policies and comprehensive forest sector strategies.
Strengthen the legal foundation for community forestry, PESA linkages, Memoranda of
Understanding, and registration processes.
Develop and apply more efficient tenure models for communities in unencumbered areas
and among nomadic tribes, starting with pilot areas and scaling up as capacities are built.
Record and map forest tenures, beginning with pilot areas in key states.
Long term
Consolidate state forestry legislative reforms.
Strengthen forest management regulation and monitoring and control systems for community forestry
Government Short term Conduct a national review of forest research around community forestry.
of India
Medium
term Develop a new national research strategy with strong community forest focus.

States Short term Develop operational manuals for community forestry.

Strengthen working plans and micro-plans in key areas, to support community forestry
Medium reforms.
term
Develop forest sector strategies with livelihood and conservation focus.
Strengthen resource assessment at state and community levels with Forest Survey of India
remote sensing data and better field data.
Develop integrated, computer-based management information systems.
Strengthen mapping capability to support management planning at division and community
levels.
Improve forest and livelihood monitoring systems with community and community support
Long term
organization partners.
Strengthen growth and yield systems and silviculture prescriptions focused on
nontraditional timber and nontimber forest products; use communities to help establish and
maintain field plots.

75
 Improve access to more efficient markets by forest communities to support improved livelihoods

Government Medium Explore policy of letting communities consolidate into clusters for more efficient
of India term management; build on established tribal institutions.
Conduct national review and reform of harvesting and transit regulations and notified species.

Long Review forest fiscal systems, and identify options to improve efficiency and transparency.
term
States Short Improve market information sharing and networks.
term Build new market-driven partnership models for marketing nontimber forest products,
timber, fuelwood, and bamboo.

Medium Strengthen extension and technical service delivery to communities and producer
term organizations.
Facilitate creation of strong local producer organizations.
With the government of India, review regulatory framework leading to reform of harvesting
and transit regulations.

Build more effective and flexible institutions to support community forestry recommended policy and program actions
Government Short Explore new approaches for private sector investment in wood supply with communities.
of India term Develop systems for information and knowledge sharing at local, state, national, and
international levels.
Consider establishing national advisory body for forestry.

Medium Strengthen policy and economics functions in the Ministry of Environment and Forests.
term Conduct national review of rural development service in forest communities.
States Short Establish model forests in states where various reforms can be tested and implemented at field
term level and used for demonstration purposes.
Establish a national and state system for allowing private consultants to work with forest
communities.
Medium
term Establish state-level advisory body with broad representation.
Conduct state-level reviews of rural development service delivery.
Develop a stronger role for community support organizations in community forestry.
Develop a strategic plan for forest department to support shifting roles and responsibilities.
Build capacity in local authorities to support decentralization of forest management.
Build capacity in communities to assume greater management responsibilities.
Strengthen forest department capability in key areas to support shifting roles needed to
support community forestry.
Long
term Establish functioning community forestry associations at state level.

Further reforms in the community-based forestry model will not be easy, given the competing
interests in the forest sector (Khare and others 2000). Government foresters are mandated to
implement policy, but they are ill equipped to deal with the challenge of change brought by JFM,
let alone further transitional approaches. While many forest officers are open to progressive
reforms, others are locked into old ways of doing business. The departments suffer from a rigid
hierarchical structure, centralized planning, and limited mechanisms for two-way dialogue about
issues and opportunities. The strong forestry conservation goal of the Ministry of Environment and
Forests and state forest departments is viewed seriously by field staff; changes that potentially
threaten this goal (real or perceived) are viewed with considerable caution. Many forest officers
have major concerns about the ability of communities to assume more forestry responsibilities, but
they accept that with proper capacity building of both communities and forest departments, many of
these concerns can be alleviated. Forest industrialists who have benefited in the past from
subsidized raw materials will continue to lobby for long-term forest leases, which would reduce the

76
opportunity for communities to supply needed timber inputs. Conservationists, who promote
biodiversity protection above rational forest utilization, often have considerable influence on forest
policy. Social activists effectively promote the interests of rural forest-based communities and tribal
people.

What is needed is a common vision at the national and state levels that focuses on forest livelihoods
as well as conservation, the enabling factors required to unlock forest values for communities, and
agreement on how to implement progressive reforms. Achieving and implementing this common
vision will be challenging. With bold steps and political will, a strong foundation can be laid to
transform community forestry into a more productive and competitive sector of the rural economy
while also addressing national forest conservation goals.

77
 8. CONCLUSIONS
Forestry represents the second-largest land use in India after agriculture. Forest communities are
generally poor and dominated by tribal groups, whose traditional cultures and institutions often
have strong links to the forest.

While most forest communities appear to be agrarian based, forests still play an important
supporting role as a safety net during lean times. Fuelwood, fodder, and other nontimber forest
products also provide seasonal subsistence. Commercial products such as timber currently play a
small role in overall livelihoods, due to cultural factors, poor incentive structures, and general
restrictions on trade posed by forest legal and policy frameworks. Although policies governing JFM
at the national and state levels have evolved over the past 18 years to put more emphasis on forest
livelihoods and poverty alleviation, the programs main thrust is still largely toward forest
rehabilitation and conservation.

India is at an important crossroads with respect to its forest sector and community-based forestry
programs. Forests are under intense pressure, mainly from human activities, with the current
consumption of timber and fuelwood well above sustainable harvest levels. There appears to be
great potential for increasing production to meet this supply gap, especially from forests managed
by communities and farms. In addition, a number of nontimber forest products, such as medicinal
plants and aromatic oils, are beginning to show economic promise.

The ability of communities to tap into these emerging opportunities is hampered by a complex legal
framework, command and control regulatory approaches, insufficient understanding of community
forest institutions, and poor access to efficient market channels. JFM still focuses largely on
commercial plantation management under forest department jurisdiction, with communities
providing protection services in return for better nontimber forest product access and a share of any
timber revenue.

There appears to be a broad agreement among many stakeholders that continued evolution of JFM
toward a model in which communities are more fully empowered with rights and responsibilities
can both strengthen forest conservation and increase rural livelihoods. There is, however, no clear
national consensus on how to implement this transition, how quickly reform should occur, or what
the immediate and longer term policy and program priorities should be.

Despite many positive reforms by some states in recent years and a number of highly committed
staff in both state and national forest agencies, in its current form JFM is unlikely to lift poor people
in most forest communities out of poverty. Accelerated reforms must place forest livelihoods within
a broader mix of livelihood opportunities, particularly by improving agricultural performance,
building stronger partnerships, and improving budget and program collaboration between state
forest departments and other rural development agencies. New approaches must strengthen
community forest rights and responsibilities and open up more direct market channels for forest
products. These broad policy thrusts need to be supported by more efficient and flexible regulatory,
monitoring, and control systems and a transformation of roles and responsibilities among key
actors, in particular state forest departments and communities.

Achieving and implementing a common vision for a more effective community-based forestry
model will be challenging; it will require time, patience, and significant investments to build the
requisite capacities. With bold steps and political will, however, a strong foundation can be laid to
transform community forestry into a more productive and competitive sector of the rural economy.

78
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